Costs Flashcards
Examples of start-up costs
Sign, fixtures and fittings, initial marketing
Operating (or running) costs
Money spent on a regular basis to keep the business running.
Examples of running costs
Fuel, raw materials, heating and lighting
Income
Money which is paid into a business
Fixed costs (or indirect costs)
Costs which DO NOT change with the number of items sold or produced.
Variable costs (or direct costs)
Costs which DO vary according to the number of items produced or sold.
Examples of fixed costs
Management salaries, insurance, rent, business rates, heating and lighting
Examples of variable costs
Raw materials, production wages.
Total costs
Fixed + variable costs
The total amount of money spent running a business over a certain period of time.
Start-up costs
The amount of money spent setting up a business before it starts trading.
