Costs, Fixed costs, Variable costs Flashcards
What is Fixed cost?
Costs that never change
What is a Variable cost?
Costs that do change
5 variable costs for a food business
Gass, Water, Electricity, Telephone
The amount of product packaging used.
Renting with a contract.
Size of products and what is bought and amount of customers.
Amount of employes and what hours they work.
What is the definition of margin of safety?
The difference between the target or the sales and the brake-even point.
What is a start up cost?
The costs that are required to start a business.
What is capital?
Money/ finance/ currency
What is running costs?
The costs of maintaining the business. E.G. Rent or ingredients of products
What is revenue?
The income of the business
What is sales turnover?
The total amount of Capital the business makes after it has surpassed the Total costs.
What is a direct cost?
A direct cost is a cost that changes depending on the product that is sold.
What is an indirect cost?
An indirect cost is the costs of something that is not change depending on the product.
What is Total cost?
The amount of capital that is required to run the business
What is Capital expenditure?
Money spent on assets
What is Revenue expenditure?
Capital spent on day-to-day costs.
What is selling price?
It is the price that you are selling your products at.
What is profit?
The amount of money made once the costs have been surpassed.
What is loss?
The amount of money the business looses because there costs are more that the capital they made.
How do you calculate Variable costs?
Venerable cost per unit X Number sold
What is the definition of brake even
The point where the capital made is equal to the costs
