Beauty Business Salon Financial Management 2

Question 1

A salon owner wants to know the minimum revenue needed to cover all costs without profit or loss. What is this figure called?

Accepted Answer

Break-even point

Answer

Gross margin

Answer

Net profit

Answer

Markup rate

Question 2

Which cost stays the same each month regardless of how many clients the salon serves?

Accepted Answer

Salon rent

Answer

Retail product cost of goods sold

Answer

Hourly stylist wages tied to bookings

Answer

Color and chemical supplies

Question 3

A service priced at $80 uses $12 in product. What is the service cost of goods percentage?

Accepted Answer

15%

Answer

8%

Answer

12%

Answer

20%

Question 4

What does 'net profit' represent on a salon income statement?

Accepted Answer

Revenue remaining after all expenses and taxes

Answer

Total sales before any deductions

Answer

Revenue minus cost of goods only

Answer

Cash in the register at day's end

Question 5

A commonly recommended target keeps total payroll (including owner) at what share of salon revenue?

Accepted Answer

Around 35-50%

Answer

Around 15%

Answer

Around 70%

Answer

Around 90%

Question 6

Why should a salon track retail sales separately from service sales?

Accepted Answer

They have different profit margins and inventory needs

Answer

Retail is exempt from sales tax

Answer

Retail cannot be sold by stylists

Answer

Service revenue is not taxable

Question 7

What is 'cash flow' in a salon business context?

Accepted Answer

The movement of money into and out of the business

Answer

The total profit for the year

Answer

The value of salon equipment

Answer

The number of clients served daily