12.4 profitability management (not assessed)

Question 1

Cost Control

Answer 1

• Fixed
• Variable
• Cost Centres
• Expense Minimisation

Question 2

Cost Control: FIXED

Answer 2

• Cost that are not dependent on the level of operating
  activity in a business
• Do not change when the level of activity changes
  E.G. Salaries

Question 3

Cost Control: VARIABLE

Answer 3

• Cost that vary in direct relationship to the levels of
  operating activity in a business
  E.G. New technology

Question 4

Cost Control: COST CENTRES

Answer 4

• Sections of a business to which costs can be directly
  attributed
  E.G. Accounting, human resources, IT

Question 5

Cost Control: EXPENSE MINIMISATION

Answer 5

• Profits can be weakened if the expenses of a business are high as they consume valuable resources

Question 6

Revenue Control

Answer 6

• Marketing objectives