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Snippets Hair Salon Co. has annual fixed costs of $1.2 million. The company has an annual output of 150,000 customers, with a variable cost per customer of $15. Calculate the total annual costs for Snippets Hair Salon Co
TC = $1,200,000 (TFC) + $2,250,000 *TVC) = $3,450,000
Gardeners’ Pots has total costs of $2,000 and fixed costs of $1,100 for an output level of 600 units. Calculate the variable cost per unit for the firm. [2 marks]
TVC = TC – TFC = $2,000 – $1,100 = $900, AVC = $900 / 600 = $1.50
Graph out what total average costs, total fixed costs, and total costs would look like on a graph.
y-axis = costs, x-axis = output. total fixed costs = horizontal line, total average costs start at origin.
Identify THREE revenue streams that The Walt Disney Company has.
Disney+, Disneyland, Disney shows, ABC news network, Marvel films etc.
True or false: Above the line marketing by placing advertisements in local and national newspapers would be an example of variable costs.
False
True or false: Packaging costs can be classified as a fixed cost of production.
False - these vary with the level of output
How is profit before tax calculated? (start with gross profit)
Gross profit - expenses - interest.
Outline TWO differences between the income statement of a non-profit entity vs. a for-profit entity.
No dividends + surplus instead of profit
What are the official names for an income statement and a balance sheet?
Statement of profit or loss + statement of financial position
True or false: The statement of financial position shows an organization's financial position at a specific point in time.
True
Identify THREE examples of intangible assets.
Patents, trademarks, brands, goodwill etc.
True or false: A balance sheet can be used to show an organization's profitability.
False - it reveals about the firm's liquidity.
