Q Chapter 18 Notes (30 pts) 1. Companies must earn a ______________ to survive. 2. The key measure of financial success is _______ profit. 3. What is the formula for net profit? 4. Two ingredients of net profit are _________ and _____________ {2pts} 5. What is the main concern if you try to cut expenses too much? {2pts} 6. What are the three choices if you want to improve net profit? {3pts} 7. The first thing that should always be strongly considered when trying to increase profitability is through consistently increasing ____________. 8. Increased sales contribute directly to the _________ _______ (net profit) 9. If the shop is losing money this is considered a ________ ________ 10. What is it called when income equals expenses? ________ ________ _______ 11. Sales and income do not typically increase without increased _________ 12. When technicians are paid a flat rate an increase in flat-rate hours is also an increase in __________ expense 13. When you increase sales you will probably increase both ____________ and __________ expenses. {2pts} 14. What would be an example to cause indirect expenses to go up _______________ 15. What happens to the break-even point when expenses go up? {2pts} 16. Sales growth is a good way to increase profit but this is not always possible. Why? {2pts} 17. What are the expenses most controlled by the service manager? {2pts} 18. If direct expenses are too high there is only one way to reduce them. What is that way? 19. What is the concern with controlling direct expenses? {2pts} 20. In order to maintain the proper gross profit percentages you have to achieve ___________ __________ ___ ______. 21. How do you calculate the average cost of sales? {2pts}