Beauty Business Financial Management and Pricing Questions and Answers Flashcards
6 cards from real Beauty Business practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Beauty Business Financial Management and Pricing Questions and Answers flashcards as text
A spa charges $120 for a facial that costs $35 in products and $25 in labor — what is the profit margin percentage on this service?
Answer: 50%
Profit margin is ($120 - $35 - $25) / $120 = $60 / $120 = 50%.
What is the break-even point for a salon with $8,000 in monthly fixed costs and an average profit of $40 per service after variable costs?
Answer: 200 services
Break-even is calculated as $8,000 / $40 = 200 services per month.
Which pricing psychology technique involves setting a service price at $49.99 instead of $50.00?
Answer: Charm pricing
Charm pricing uses prices ending in .99 or .95 to make them appear lower than they are.
In a beauty business, what does the term 'accounts receivable' refer to?
Answer: Money owed by clients for services already rendered
Accounts receivable represents money that clients owe the business for services or products already provided.
A salon owner bundles a haircut, color, and styling together at a discounted rate — what is this pricing strategy called?
Answer: Bundle pricing
Bundle pricing combines multiple services into one package at a reduced total price.
What financial ratio compares a beauty business's current assets to its current liabilities to assess short-term ability to pay debts?
Answer: Current ratio
The current ratio divides current assets by current liabilities to measure short-term liquidity.