Business Flashcards
Break Even point equation
Break-Even point =
Fixed Cost÷ Sales price – Variable costs
Margin of safety equation
Margin of safety=
Actual sales - BEP sales
interest equation
interest=
amount borrowed x interest rate
Profit equation
profit=
total revenue - total costs
revenue equation
revenue=
product sold x selling price
Variable costs (definition)
Thee are costs which do change when the amounts of goods do.
examples (variable costs)
coffee beans, paper cups, interest payments, electricity
fixed costs(definition)
They are costs which do not change even if the amount of goods do.
Examples (Fixed cost)
rent, salaries, ads, insurance
Profit(definition)
The amount of money which is left after revenue-cost
BEP(definition)
A point in a business where the profits are equal to the costs so they are broken even.
revenue(definition)
Is the money coming into the business through sales from goods or services.
