Misc. Concepts
What is included in the overhead of a business?
All costs of running a business...
Paying employees, electricity, buying supplies/products, heat/AC, maintenance, insurance, others?
Give 3 examples of expenses that you can't reduce in your budget to save money.
What type of expenses are they?
Answers vary: rent, mortgage, student loan payment, etc.
Fixed expenses
State income tax is 3.5%. You make $460 weekly. What is your weekly state income tax?
460 x 0.035 = $16.10
Find the cost of a leather sofa if the selling price is $1,899.00 and the markup is $804.00.
Cost = 1899 - 804 = $1,095.00
Your annual salary as a construction worker is $47,080. You're paid biweekly. What is your salary per pay period?
47,080 / 26 = $1,810.77
What things should you consider when pricing items for a business?
You want to make a profit so overall your total markup should be greater than the overhead.
You deposit four five-dollar bills, six ones, and three twenties. You also have 3 quarters, 2 dimes, and 50 nickles. You receive a fifty back. What is the total of your deposit?
4(5) + 6(1) + 3(20) + 3(0.25) + 2(0.10) + 50(0.05) - 50 = $39.45
Your employer pays 70% of medical insurance. It costs $4000. How much is deducted from your paycheck to pay for medical insurance?
100 - 70 = 30%
4000 x 0.3 = $1200
Give examples two Christ-like business practices.
Answers vary:
Paying employees as much as you can afford (a fair wage). Providing employees good benefits (insurance, etc.). Paying the taxes you owe. Fair prices for your customers. Obtaining products locally if possible. Options to pay-it-forward if someone can't afford something. Others?
Compare the unit prices of the following and then select the best buy. Round to the nearest tenth of a cent.
8 markers for $2.00
15 markers for $4.50
24 markers for $8.75
8 markers unit price = $0.25
15 markers unit price = $0.30
24 markers unit price = $0.365
Best Buy: 8 markers
What is the difference between gross and net income?
Gross: before deductions (taxes, health insurance, 401k, etc.)
Net: after deductions (take-home pay)
Your monthly living expenses are $2,090. Your monthly fixed expenses are $1,560. Your annual expenses total $8,032. What are your total monthly expenses?
Mo. Share of annual: 8032 / 12 = $669.33
Total = 2090 + 1560 + 669.33 = $4319.33
You make $30,000 annually. What is your total annual deduction for social security and medicare?
SS = 30000 x 0.062 = $1,860
Med = 30000 x 0.0145 = $435
Total = 1860 + 435 = $2295
Roy's Florist buys roses for $15.99 a dozen. It sells them for $37.95 a dozen. What is the markup rate based on the selling price? Based on the cost?
Markup = 37.95 - 15.99 = $21.96
Based on SP: 21.96/37.95 = 0.57866 = 57.9%
Based on Cost: 21.96/15.99 = 1.3734 = 137.3%
You earn $9.10 per hour. If you work more than 35 hours in a week, you get paid a time and a half overtime. You worked 37 hours last week. What is your total pay?
Straight-Time Pay = 9.10 x 35 = $318.50
Overtime Pay = 9.10 x 1.5 x 2 = $27.30
Total Pay = 318.50 + 27.30 = $345.80
List 4 specific taxes that people have to pay.
Answers vary.
Sales tax, sinners tax, tariffs, federal income tax, state income tax, medicare, social security, real estate tax, property tax, others?
Describe the process of reconciling your check register to your bank statement.
1. Record any missing transactions in your check register.
2. Subtract outstanding checks from statement balance
3. Add outstanding deposits to statement balance
4. New statement balance should now match your check register's balance
Find the federal income tax withheld if a married person claims three allowances and makes $800 weekly. Use the tax table method.
$53
Sport Shop purchases life jackets for $44.98 each. It sells the jackets for $89.99 each. The owner estimates the overhead expenses to be 40% of the selling price of the merchandise. What is the net profit on each jacket?
Markup = 89.99 - 44.98 = $45.01
Overhead = 89.99 x 0.40 = $36.00
Net profit = 45.01 - 36.00 = $9.01
You do a little grocery shopping but only have $10 exactly - no change.
You buy a frozen pizza for $3.50, carrots for $0.87, ice cream for $4.15, and some mints for $1.37. Sales tax is 6%.
Do you have enough money? How much extra do you have or how short are you?
Total Selling Price = 3.50 + 0.87 + 4.15 + 1.37 = $9.89
Sales Tax = 9.89 x 0.06 = $0.59
Total Purchase Price = 9.89 + 0.59 = $10.48
No, need $0.48.
Give 1 of the 3 broad categories of taxes and explain what it means. Give an example of that tax.
Flat tax: Everyone pays the same rate or amount. (Example - sales tax)
Regressive tax: More income means a lower percentage taxed. (Example - Social Security)
Progressive tax: More income means a higher percentage taxed. (Example - federal income tax)
Calculate the total compound interest earned for $1300 in a savings account that compounds semiannually at 4% at the end of one year.
P1: 1300 x 0.04 x 0.5 = $26
P2: 1326 x 0.04 x 0.5 = $26.52
Total interest = 26 + 26.52 = $52.52
Find the net pay for someone who is single who claims one allowance, lives in a state with 4% income tax, and pays $35 for medical insurance each week. They make $575.
(Consider, FIT, SIT, SS, Med, and Med Ins)
FIT = $62, SIT = 575 x 0.04 = $23
SS = 575 x 0.062 = $35.65, Med = 575 x 0.0145 = $8.34
Total Deductions = 62 + 23 + 35.65 + 8.34 + 35 = $163.99
Net Pay = 575 - 163.99 = $411.01
Find the selling price if toothpaste costs $1.49 and the markup is 25% of the selling price.
Complement = 100 - 25 = 75%
SP = 1.49/0.75 = $1.99
You're a real estate agent. You earn graduated commission on your sales each month. You earn 3% on the first $80000, 5% on the next $80000, and 8% on sales over $160,000. You sell $200,000 this month. What is your commission?
0.03 x 80,000 = $2400
0.05 x 80,000 = $4000
0.08 x (200,000 - 160,000) = $3200
Total = 2400 + 4000 + 3200 = $9600