Topic Test Answers

Korey is planning to open a comic book store. In his first year of operation, Korey expects to average $1,000 of profit each month. He then expects profits to increase by 6% each year for the next 4 years. How much does Korey expect to make in profits in his fifth year of operation?

In order to clear out room for new merchandise, James decided to mark down some of the items for sale in his electronics store. He marked down DVD players by 36%, and he marked down stereo tuners by 22%. If DVD players cost $41.60 after the markdown and stereo tuners cost $69.42 after the markdown, which item’s price was reduced by more, and by how many dollars more was it reduced? Round all dollar values to the nearest cent.

Below is last month's business income statement for Korey's Comics. Using the information provided in the statement, determine net income for Korey's Comics last month.Korey?s Comics Monthly Business Income Statement RevenueSales:$6,825 Returns:$215 Net Sales: Cost of Goods Sold Beginning Inventory:$780 Purchases:$1,795 Goods Available for Sale: Ending Inventory:$795 Total Cost of Goods Sold: Gross Profit:: Operating ExpensesWages:$1,460 Rent:$650 Utilities:$185 Advertising:$90 Taxes:$125 Total Operating Expenses: Net Income:

Put the following items in order from most expensive to least expensive.ItemBase PriceChangeDirectionToaster$23.3536%MarkupDVD$20.3666%MarkupHeadphones$69.0956%MarkdownJeans$55.0841%Markdown

Penny bought a juice squeezer for $10. She can make a bottle of orange juice for a cost of $0.75, and she sells her orange juice for $1.85 per bottle. Which of the following graphs best illustrates Penny’s situation? I. II. III. IV.

Radwyn Horticulture is a company which focuses upon selling saplings. The company can grow a sapling for $15.45, and can sell that sapling for $36.50. There are three main salespeople at Radwyn Horticulture, each of whom earns a different commission per sapling sold, as shown in the table below. Salesperson Commission/Sale Lara $8.15 Ian $11.25 Ari $8.90 Radwyn Horticulture’s fixed overhead expenses last month came to $7,699.45. It is known that one salesperson sold 191 saplings, one salesperson sold 245 saplings, and one salesperson sold 221 saplings. Which arrangement of sales would cause Radwyn Horticulture to break even?

Bill owns a company (Bill’s Gates) that manufactures fence panels. Bill’s Gates had a net profit margin last quarter of 18%. Which of the following actions will not help Bill increase his net profit margin this year, assuming he sells the same number of fence panels?

The following graph shows the relationship between cost and revenue for a manufacturer of lab coats. Which of the following pairs of equations best suits this graph? Cost I Cost II Revenue III Revenue IV

Which of the following expenses is not a variable cost?

Korey is planning to open a comic book store. When the store opens, he plans to be the only employee. As the business grows, he will extend his hours of operations and hire additional employees as necessary. In Korey’s business plan, this information should be included in the _____ component.

At the beginning of January, Kesia Records paid $148,950 to acquire the exclusive rights to a new album. It costs them $1.13 to print a copy of this album, which they can sell for $9.75. The following chart shows the sales of that record, along with the overhead expenses of running a record studio, not counting production costs.MonthAlbums SoldExpensesJan.5,486$27,714Feb.8,191$21,689Mar.4,796$25,195Apr.7,490$28,766May6,272$24,604Jun.5,131$29,040In whch month did Kesia Records first break even?

Korey’s comic book store has been up and running for 4 years. Korey feels that his store has been successful and is considering moving to a larger property to allow for greater inventory and customer opportunities in his business. He would like investors to cover the cost of his expansion. The profits of Korey’s comic book store for its first four years are outlined below. According to this information, what would be the best estimate for Korey to quote as expected profits in the next year in his new business plan? Year Net Profits 1 $14,250.00 2 $15,390.00 3 $16,621.20 4 $17,950.90 5

Sodresh Sundials manufactures large stone sundials. It costs $14.22 to produce a sundial, which can then be sold for $36.75. The following table shows Sodresh Sundials’s non-production overhead costs and sundials sold over a period of one year.MonthOverhead ($)SoldJan.9,176290Feb.7,510329Mar.7,952309Apr.7,071288May8,942303Jun.9,249329Jul.7,813400Aug.6,821350Sep.9,382382Oct.8,117329Nov.9,018425Dec.6,503424In how many months did Sodresh Sundials either break even or turn a profit?

Winter is coming, so Sasha decides to buy new outdoor gear. She has a coupon good for 25% off. She buys a coat with an original price of $85.75, a pair of boots with an original price of $71.99, a scarf with an original price of $24.25, and a pair of gloves with an original price of $44.95. She pays a total of $208.94. To which item did Sasha apply her coupon?

Jan went grocery shopping and only bought items which had been marked down. The items she bought, along with their prices, can be seen below. Item Final Price Markdown Chicken $8.47 15% Milk $2.16 20% Onions $0.89 10% Potato chips $1.45 12% Oranges $1.36 25% Flour $4.39 18% What would be the total of Jan's grocery bill if she purchased all of the items before they were marked down?

Faye, George, and Hannah are salespeople working at Lasht Cellular. It costs Lasht Cellular $21.49 per phone to stock a certain brand of phone, which they sell for $68.75. The three salespeople earn differing amounts of commission per phone sold, based on their seniority. The following table shows their respective sales in the past month. Salesperson Phones Sold Commission/Phone Faye 214 $10.25 George 176 $8.90 Hannah 251 $9.65 If Lasht Cellular had fixed overhead costs of $14,350 last month, how much profit did it gain last month?

Which of the following statements best describes the difference between net income and gross profit?

Sam is planning to start a pool cleaning business from his home, but has realized that he does not have enough money in savings or credit to pay for the set-up costs and first year of operation. Which of the following would not be a good way for Sam to get the money to start his business?

The table below shows possible cost and revenue equations for a manufacturer of cameras. Cost I Cost II Revenue III Revenue IV Which of the following pairs of equations will never break even?

Korey is planning to open a comic book store. He has developed the following expense breakdown for set-up and operation for the first year. Korey has $8,500 in savings and $25,000 in inheritance money to use to open his store. If Korey doesn’t make any changes to his initial expenses, what percent of the total set-up and operation expense will have to be funded through loans or investors? ExpenseAmountRent$10,800Insurance$3,000Store Fixtures$2,700Computer and Cash Register$1,200Inventory$17,400