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Questions and Answers
Which statement accurately describes fixed costs?
Which statement accurately describes fixed costs?
- They include costs that are incurred once.
- They vary directly with production volume.
- They change based on seasonal demand.
- They remain constant regardless of production levels. (correct)
What is the formula for calculating percentage change?
What is the formula for calculating percentage change?
- $ rac{ ext{New Value} + ext{Old Value}}{ ext{New Value}} imes 100 ext{ extperthousand} $
- $ rac{ ext{Old Value} - ext{New Value}}{ ext{New Value}} imes 100 ext{ extperthousand} $
- $ rac{ ext{Old Value} + ext{New Value}}{ ext{Old Value}} imes 100 ext{ extperthousand} $
- $ rac{ ext{New Value} - ext{Old Value}}{ ext{Old Value}} imes 100 ext{ extperthousand} $ (correct)
How do you calculate gross profit using total revenue and total variable costs?
How do you calculate gross profit using total revenue and total variable costs?
- Gross Profit = Total Revenue + Total Variable Costs
- Gross Profit = Total Revenue - Estimated Fixed Costs
- Gross Profit = Total Revenue - Total Variable Costs (correct)
- Gross Profit = Total Variable Costs - Total Revenue
What does the Herfindahl Index measure?
What does the Herfindahl Index measure?
Which of the following metrics does NOT represent a type of market share?
Which of the following metrics does NOT represent a type of market share?
What is the contribution margin formula in terms of price per unit and variable costs per unit?
What is the contribution margin formula in terms of price per unit and variable costs per unit?
What does the term 'eye of the customer' refer to in marketing metrics?
What does the term 'eye of the customer' refer to in marketing metrics?
Which formula is used to find the old value if the new value and percentage change are known?
Which formula is used to find the old value if the new value and percentage change are known?
Which of the following costs are referred to as operating costs?
Which of the following costs are referred to as operating costs?
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Study Notes
Fixed vs. Variable Costs
- Variable costs change based on the volume of production.
- Fixed costs remain constant regardless of production volume.
- Capital costs last more than one year.
- Operational costs last less than or equal to one year.
Percentage Change
- The percentage change formula can be used to calculate the increase or decrease in a value over time.
- The formula can be manipulated to solve for the old or new value.
Market Share and Market Analysis
- Market share is a measure of the percentage of the total market that a firm controls.
- The market share can be calculated in terms of revenue or units sold.
- Relative market share measures a firm’s market share against its largest competitor.
- The Herfindahl Index is a measure of market concentration.
Contribution Margin
- Contribution margin is the difference between the selling price of a product and its variable costs.
- It can be expressed in dollars or as a percentage of the selling price.
- The contribution margin can be used to calculate variable costs, the price of a product, or the break-even point.
- Gross Profit is the total revenue minus the total variable costs.
- Net profit is the gross profit minus fixed costs.
MKT100 - Marketing
- The value of a product or service to a customer is determined by the benefits received minus the costs incurred.
- The cost incurred includes both the financial price and any non-financial costs.
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