Cost and Revenues Flashcards
What are fixed costs?
Costs that do not change when a business changes level of output.
Fixed cost exist when a business is not producing any goods and services.
Give examples of fixed costs?
Rent, Marketing , loans , machinery
What are variable costs?
Variable costs vary with the output.The more you sell the higher the variable costs.
What are examples of variable costs?
Raw materials, labour ,fuel
What are semi- variable costs?
Expenses incurred by a business that has fixed and variable elements.
Give examples of semi- variable costs?
Fuel to operate the amount of lorries used.
Why is it important to know total costs for managers?
Managers can use this to change levels of output and changes of prices of products.
How do you calculate total costs?
Fixed costs + Variable costs
What is business revenues?
The income or earnings over a period of time
How do u calculate business revenues?
Revenue = quantity sold x average price
