costs

Question 1

Start up costs​

Answer 1

Start-up costs refer to the expenses that a new business incurs before it begins its regular operations. These costs are associated with setting up and establishing the business.

To pay for these the enterprise needs to source the start-up capital. This could be from owners own money, money loaned from family and friends, business loan or an investor​

Question 2

Running costs​

Answer 2

consists of 2 costs
Fixed costs ​
Variable costs ​

Question 3

Fixed costs ​

Answer 3

These are costs that the enterprise has to pay n mater how well it is doing.​

-Heating and lighting charges​

-Rent​

-Insurance​

-Business rates​

Question 4

Variable costs ​

Answer 4

These costs are directly linked with the number of items produced or sold. For example:​

-The more orders a clothing manufacturer receives for t-shirts the more material it will need to produce them​

-The more vehicles a car mechanic repairs and services, the more replacement parts would be required.​

Question 5

Total running costs​

Answer 5

Fixed costs + variable costs