Business Plan Chapter 7 Quiz

Questions and Answers

Which of the following is NOT a component of an organizational and management plan?

Management team credentials

Marketing strategy (correct)

Organizational structure

Legal form of the business

The logo of a business can be a replication of existing logos if it is slightly modified.

False

What is an organogram?

It is a visual representation of an organizational structure showing roles and lines of reporting.

The organizational plan must clearly state the business's __________.

name Signup and view all the answers

Match each type of business form with its description:

Sole Proprietorship = Owned by a single individual Partnership = Owned by two or more individuals Corporation = A legal entity separate from its owners Limited Liability Company = Combines elements of partnership and corporation Signup and view all the answers

Which of the following is NOT a common source of recruitment?

Job fairs Signup and view all the answers

The training strategy occurs before the selection of candidates.

False Signup and view all the answers

What is the purpose of a recruitment strategy?

To generate a pool of job applicants who are interested in working for the organization. Signup and view all the answers

The first step in the selection process is the ______.

preliminary interview Signup and view all the answers

Match the following recruitment sources with their descriptions:

Internal transfer = Promoting an employee from within the organization Press advertisement = Public posting of job openings in media Employee recommendation = Current employees refer candidates Executive search = Hiring a firm to find top talent Signup and view all the answers

What is the purpose of assumptions in the context of noncurrent asset requirements?

To determine noncurrent asset prices and estimated life Signup and view all the answers

Pre-operating expenses can be capitalized and amortized over three years if deemed significant.

True Signup and view all the answers

Name two activities that may incur pre-operating expenses.

Conducting feasibility studies, business registration Signup and view all the answers

The planned layout of the office must be ___ and presented.

drawn Signup and view all the answers

Match the following terms with their descriptions:

Noncurrent Assets = Long-term assets that are not expected to be converted to cash within a year Office Layout = Arrangement of office equipment and furniture Pre-operating Expenses = Costs incurred before the business starts operations Maintenance Plan = Strategy for upkeep and repair of assets Signup and view all the answers

Which of the following is NOT a pre-operating activity?

Monthly salary payments Signup and view all the answers

The total pre-operating expenses are included in the organisation and management overhead costs.

True Signup and view all the answers

Name one expense item that is considered part of organisation and management overhead costs.

Salaries Signup and view all the answers

Obtaining samples is a part of ______ expenses.

pre-operating Signup and view all the answers

Match each item with its category:

Salaries = Organisation and management overhead costs Trial production = Pre-operating expenses Training of employees = Organisation and management overhead costs Business Registration = Pre-operating expenses Signup and view all the answers

Which of the following is an example of an expense incurred during organisation and management?

Telephone charges Signup and view all the answers

Electricity and water costs are classified as pre-operating expenses.

False Signup and view all the answers

What is the purpose of estimating pre-operating expenses?

To prepare financially for starting a business. Signup and view all the answers

What is a key component of orienting and training new employees?

Articulated strategies for training Signup and view all the answers

The cost of administrative personnel includes both salary and benefits.

True Signup and view all the answers

What types of equipment are considered noncurrent assets for administration?

Vehicles, computers, printers, and furniture. Signup and view all the answers

The total cost of administrative personnel can be projected using __________.

Table 7.1 Signup and view all the answers

Match the following terms with their descriptions:

Salary = Regular compensation paid to employees Depreciation = Reduction in value of an asset over time Benefits = Additional perks provided to employees beyond salary Noncurrent Assets = Long-term resources used in business operations Signup and view all the answers

Which of the following is NOT a component required for preparing an organisation and management plan?

Product pricing strategy Signup and view all the answers

Estimations for salaries and expenses must be made based on relevant data and applicable rules.

True Signup and view all the answers

What is the purpose of Learning Activity 7.1?

To facilitate learners in preparing an organisation and management plan for their proposed business. Signup and view all the answers

The total organisation and management expenses before depreciation and __________ expenses must be clearly stated.

pre-operating Signup and view all the answers

Match the components required for an organisation and management plan with their descriptions:

Legal form of the proposed business = Type of business structure (e.g., LLC, corporation) Key positions and their roles = Description of important roles in the organisation Cost of administrative personnel = Financial estimation for staff salaries Noncurrent asset requirement = Assets necessary for long-term operational purposes Signup and view all the answers

Study Notes

Organizational and Management Plan Overview

The organizational and management plan is a key component of the business plan, outlining the legal structure, organizational hierarchy, management credentials, and financial estimates.
This plan highlights the business's legal form, key roles, and noncurrent asset requirements.

Legal Form of Proposed Business

Defines three main business forms: sole proprietorship, partnership, and corporation.
Entrepreneurs must explain their choice of business type.

Business Name and Logo

The plan should specify the chosen business name and include a logo, which should be unique and comply with intellectual property laws.
Legal naming requirements must be honored to avoid duplication.

Capability of the Proponents

A detailed profile of the proponents should include educational qualifications, professional experience, skills, and relevant background information.

Organizational Structure

The proposed business should depict a clear organizational structure that defines roles, communication lines, and reporting relationships.
Different organizational models such as line and functional structures can be utilized.

Key Positions and Roles

Identification of key positions is crucial, with clearly described responsibilities associated with each role.

Recruitment, Selection, and Training of Staff

Recruitment Strategy: Methods to attract applicants include internal transfers, advertisements, educational institutions, and employee referrals.
Selection Strategy: Procedures should encompass preliminary interviews, application checks, and tests tailored to job requirements.
Training Strategy: New employees must receive thorough orientation and ongoing training for effective performance.

Estimation of Pre-Operating Expenses

Pre-operating expenses involve costs incurred before business commencement, including feasibility studies, registrations, and supplier agreements.
Significant pre-operating expenses may be capitalized and amortized, typically over three years.

Organization and Management Overhead Costs

Overhead costs encompass salaries, office supplies, utility bills, and maintenance of noncurrent assets.
A comprehensive projection of these costs is essential for financial planning over a three-year period.

Assumptions

Assumptions related to asset requirements, pricing, and longevity are necessary for accurate financial estimations and must be explicitly stated for clarity.

Noncurrent Assets Requirement for Administration

Noncurrent assets such as computers, printers, and office furniture are vital for administrative functions.
Detailed specifications, quantities, purchase prices, and depreciation estimates should be included.

Office Layout

The office layout refers to the strategic arrangement of equipment and furniture to facilitate efficient workflow.

Organizational and Management Expenses

Expenses must be thoroughly outlined before accounting for depreciation and pre-operating costs to give a complete overview of organizational financial health.

Learning Activity

Students are encouraged to create a comprehensive organizational and management plan for a proposed business using provided components, ensuring alignment with previously learned concepts.

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Description

Test your knowledge on the organizational and management overhead costs as outlined in Chapter 7 of the business plan. This quiz covers key concepts such as the organizational structure, management team roles, and asset requirements. Perfect for students looking to deepen their understanding of business planning.

Business Plan Chapter 7 Quiz

Questions and Answers

Which of the following is NOT a component of an organizational and management plan?

The logo of a business can be a replication of existing logos if it is slightly modified.

What is an organogram?

The organizational plan must clearly state the business's __________.

Match each type of business form with its description:

Which of the following is NOT a common source of recruitment?

The training strategy occurs before the selection of candidates.

What is the purpose of a recruitment strategy?

The first step in the selection process is the ______.

Match the following recruitment sources with their descriptions:

What is the purpose of assumptions in the context of noncurrent asset requirements?

Pre-operating expenses can be capitalized and amortized over three years if deemed significant.

Name two activities that may incur pre-operating expenses.

The planned layout of the office must be ___ and presented.

Match the following terms with their descriptions:

Which of the following is NOT a pre-operating activity?

The total pre-operating expenses are included in the organisation and management overhead costs.

Name one expense item that is considered part of organisation and management overhead costs.

Obtaining samples is a part of ______ expenses.

Match each item with its category:

Which of the following is an example of an expense incurred during organisation and management?

Electricity and water costs are classified as pre-operating expenses.

What is the purpose of estimating pre-operating expenses?

What is a key component of orienting and training new employees?

The cost of administrative personnel includes both salary and benefits.

What types of equipment are considered noncurrent assets for administration?

The total cost of administrative personnel can be projected using __________.

Match the following terms with their descriptions:

Which of the following is NOT a component required for preparing an organisation and management plan?

Estimations for salaries and expenses must be made based on relevant data and applicable rules.

What is the purpose of Learning Activity 7.1?

The total organisation and management expenses before depreciation and __________ expenses must be clearly stated.

Match the components required for an organisation and management plan with their descriptions:

Study Notes

Organizational and Management Plan Overview

Legal Form of Proposed Business

Business Name and Logo

Capability of the Proponents

Organizational Structure

Key Positions and Roles

Recruitment, Selection, and Training of Staff

Estimation of Pre-Operating Expenses

Organization and Management Overhead Costs

Assumptions

Noncurrent Assets Requirement for Administration

Office Layout

Organizational and Management Expenses

Learning Activity

Studying That Suits You

Description

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