27 Costs

Question 1

Define costs

Answer 1

Expenses that must be met when setting and running a business

Question 2

Define fixed costs

Answer 2

Costs that do not vary with the level of output

Question 3

Define variable costs
State the formula

Answer 3

Costs that change when output levels change
Variable cost per unit * output

Question 4

Define total costs

Answer 4

Fixed costs and variable costs added together
Total fixed costs + total variable costs

Question 5

Define total revenue
State the formula

Answer 5

Money generated from the sale of output
Price * quantity sold

Question 6

Define profit
State the formula

Answer 6

Total revenue - total costs