The _____ Represents How a Startup Uses Its Cash to Cover

question 1

Multiple Choice

The _____ represents how a startup uses its cash to cover its overhead before it generates a positive cash flow from operations.

• A) m onthly burn rate
• B) c ontribution margin
• C) gross margin
• D) bootstrap process
• E) product resource guide

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Definitions:

Fixed Overhead

Regular, consistent costs incurred by a business that are not affected by the level of goods or services produced, such as rent and salaries.

Budget Variance

The difference between the budgeted or planned amount of expenses or revenues, and the actual amount incurred or earned.

Predetermined Overhead Rate

A rate calculated before the period begins, used to allocate manufacturing overhead to products based on a specific activity base.

Volume Variance

The difference between planned production volumes and actual production volumes, and its effect on budgeted costs.