Practise calculating and interpreting revenue, cost, profit and break-even data, including charts, tables and business decisions.
The Better Toy Store (TBTS) is a children's toy shop. TBTS has three shops in Singapore. Two of the shops are located in busy shopping malls and the third is located at the Jewel Changi Airport. TBTS has a website for customers looking to buy toys online.
TBTS selects toys to sell that are excellent for play, value, design and quality. All TBTS toys are environmentally friendly.
Which one of the following is a variable cost?
Select one answer.
Rent paid
Management salaries
Insurance agreed
Raw materials
Figure 1 is a financial extract from TBTS based on the sale of 160 wooden toy carts.
Figure 1
Calculate the total costs for TBTS of making 160 wooden toy carts. You are advised to show your working.
IKEA is a well-known home furniture retailer with stores throughout the world. It was started in 1943 by Ingvar Kamprad when he was given some money by his father for doing well at school. He wanted to produce furniture at a price that people could afford to buy.
He realised that transporting furniture to customers was difficult as goods were often damaged. He developed flat packs to avoid damage. A flat pack contained all the materials needed to self-assemble a table, a chair or a bed.
All IKEA stores are run as franchises.
Which one of the following are equal in a break-even graph?
Select one answer.
Fixed costs and variable costs
Fixed costs and revenue
Total costs and fixed costs
Total costs and revenue
Irsi Chocolatier will need to consider many factors if it wants to introduce its new product of chocolate lollipops.
Analyse the limitations for Irsi Chocolatier of using break-even charts to decide whether it should sell the new product.