6.3 -Financial Terms And Caluclations Flashcards
1
Q
What are fixed costs (FC)
A
Costs that don’t vary with the levels of output in a business
2
Q
Examples of Fixed costs
A
- Rent
- Mortgage
- Insurances
3
Q
Variable costs (VC)
A
Variable costs are costs that vary with level of trade
4
Q
Total costs formula
A
TC = FC + VC
5
Q
Sales revenue formula
A
SR = Price (P) x Quantity (Q)
6
Q
Profit/loss formula
A
P = TR - TC
7
Q
Average rate of return formula
A
Average annual profit/Initial capital outlay x100
8
Q
What is break-even
A
Break even is the point where the business makes neither a loss nor a point
