Costs (fixed & variable), revenue and profit Flashcards
1
Q
Variable costs:
A
costs which very directly with output in the short run. (e.g. raw materials/ direct labour)
2
Q
Fixed costs:
A
costs which do not vary with output in the short run. (e.g. rent)
3
Q
Price (sp/unit):
A
the amount paid by a consumer to purchase one unit of a product.
4
Q
Total revenue:
A
income received from an organisations business activities.
5
Q
Always assume Production Amount (qty) =
A
Sales Amount (qty)
6
Q
3 examples of fixed costs:
A
stationary expenditure
advertising expenditure
property rent
7
Q
3 examples of variable costs:
A
raw materials
wages (direct)
power (electricity)
8
Q
Quantitative:
A
numbers financially
9
Q
Qualitative:
A
non-financial
10
Q
Profit:
A
the difference between the income of a business and its total costs.
