3.1.1

Question 1

What is profit

Answer 1

The reward or return for taking risks and making investments

Question 2

Relationship between missions and objectives

Answer 2

Missions are a general statement of how a business will achieve their vision
Objectives are specifics actions and timelines for achieving their goals

Question 3

Common business objectives

Answer 3

• Staying profitable
• Providing excellent customer service
• Sustainable growth (careful use of a company’s resources such as finances or personnel (people who are employed in the company)
• Staying ahead of competition

Question 4

Why do businesses set aims and objectives

Answer 4

Aims and objectives give a company a sense of direction - this provides a framework around which to create their plans and therefore allowing companies to set particular targets and monitor progress towards them

Question 5

revenue?

Answer 5

The amount (value) of a product that a customer actually buys from a business

Question 6

What are fixed costs (examples)

Answer 6

Costs that do not change as output varies. Examples include:

• Rent and council tax
• Wages and salaries
• Heating lighting and other energy costs

Question 7

What are variable costs and what are examples of them?

Answer 7

Variable costs are costs which change as output varies 
Examples include:
-raw materials 
-Labour costs
-distribution costs

Question 8

Total costs?

Answer 8

When variable costs and fixed costs are added together