CSA Financial Planning & Budgeting 2

Question 1

A sugar artist charges $450 for a wedding cake and spends $120 on supplies. What is the gross profit margin?

Accepted Answer

73.3%

Answer

Gross profit margin = (Revenue - COGS) / Revenue × 100 = ($450 - $120) / $450 × 100 = 73.3%.

Question 2

Which pricing strategy sets prices based on what competitors charge for similar sugar art pieces?

Accepted Answer

Competitive pricing

Answer

Competitive pricing sets prices relative to what competitors charge for comparable products.

Question 3

A sugar artist wants to save $6,000 for a new airbrush system over 12 months. How much must be set aside monthly?

Accepted Answer

$500

Answer

$6,000 ÷ 12 months = $500 per month must be saved.

Question 4

What does accounts receivable represent on a sugar art business's balance sheet?

Accepted Answer

Money customers owe the business

Answer

Accounts receivable represents money that customers owe the business for services or products already delivered.

Question 5

A cake studio has fixed monthly costs of $2,000 and sells cakes at $250 each with $80 variable cost. How many cakes must be sold to break even?

Accepted Answer

14

Answer

Contribution margin = $250 - $80 = $170; break-even = $2,000 ÷ $170 ≈ 12 (rounding up to 12 is not enough — $2,040 > $2,000, so actually ceiling is 12, but $170×12=$2,040 covers $2,000), correctly 12 cakes.

(CSA) Certified Sugar Artist Practice Test

(CSA) Certified Sugar Artist Practice Test

CSA Financial Planning & Budgeting 2