Beauty Business Financial Management and Pricing 3

Question 1

A stylist earns 45% commission on a $60 color service. How much does she earn from that service?

Accepted Answer

$27

Answer

45% of $60 is $27.

Question 2

What financial statement shows a salon's revenues and expenses over a period of time?

Accepted Answer

Income statement

Answer

The income statement (profit and loss) reports revenue and expenses over a period.

Question 3

A salon buys shampoo at $8 wholesale and sells it at $16 retail. What is the markup?

Accepted Answer

100%

Answer

An $8 increase on an $8 cost is a 100% markup.

Question 4

Which of the following is a variable cost for a salon?

Accepted Answer

Color and developer used per client

Answer

Product used per service rises and falls with client volume, making it variable.

Question 5

What is the main benefit of offering prepaid service packages to clients?

Accepted Answer

It improves cash flow and client retention

Answer

Prepaid packages bring cash in early and encourage repeat visits.

Beauty Business Practice Test