Chapter 2 The Building Block of Business by hG9ux5

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									Name:                                     Chapter 2 Workbook             The Building Block of Business
Date: 10/4/2012                                                       The Economies of One Unit of Sale
Period:


CRITICAL THINKING ABOUT…THE BUILDING BLOCK OF BUSINESS

    1. If you start a successful business, how will you spend your time? How would you want
        to be paid? (Choose one of the four options described in the chapter.) Explain.




    2. What are your personal goals for the next five years? What do you hope to accomplish?
        Write a one-sentence “vision statement” that describes what you would like to achieve
        over the next five years.



KEY CONCEPTS

    3. Gross profit is a business’s profit before which other costs are subtracted?



    4. What is the average unit of sale for the following businesses?


            a. A restaurant that serves $600 per day in meals to 60 customers (the average cost
                of goods sold per unit is $5.00)?


            b. A record store that sells $1,000 worth of CDs per day to 40 customers (the
                average of cost of goods sold per unit is $12.50)?


For the following businesses, define the unit of sale and determine the gross profit per unit.

    5. Pete, the owner of the Funky DJ, provides services to parties and other social events in
        his neighborhood. He charges $40 per hour. He rents a double turntable from his older
        brother at $10.00 per hour every time he works.




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Name:                                    Chapter 2 Workbook         The Building Block of Business
Date: 10/4/2012                                                  The Economies of One Unit of Sale
Period:


    6. Sue, of Sue’s Sandwich Shoppe, sells sandwiches and sodas from a sidewalk cart in a
        popular park near her house. She sets up cart in the summers to raise money for college.
        Last month she sold $1,000 worth of product (sandwiches and sodas) to 100 customers.
        Her unit of one sandwich (COGS $4), plus soda (COGS $1). Total COGS = $5




VOCABULARY



Match the vocabulary word to its correct definition.

    A. Cost of goods sold
    B. Economies of one unit of sale (EOS)
    C. Gross profit
    D. Unit of sale



    1. ____     one unit of the product or service a business sells.
    2. ____     the cost of selling “one additional unit”
    3. ____     system of determining profits and costs for each unit of sale.
    4. ____     revenue minus cost of goods sold.




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