Costs/ Revenue/ Profit Flashcards
What is total revenue normally know as?
Total costs
Total Fixed costs + Output = ?
Average OR Unit fixed costs
List 4 examples of fixed costs.
Rent
Rates
Management salaries
Loan Repayments
List 4 example of variable costs.
Stock & Raw Materials
Bought-in price of goods held for resale
Fuel & Energy use
Wages
List some semi-variable cost. (Bit of both - FC+ VC)
Telephone bills
WiFi
Materials
How is profit calculated formulae wise?
Margin of safety x contribution per unit = Profit
How is output calculated formulae wise?
(target profit + fixed cost) % (contribution per unit) = output
What are Direct Costs?
Direct costs refer to materials, labor and expenses related to the production of a product.
What are Indirect Costs?
Indirect costs are costs that are not directly accountable to a cost object (such as a particular project, facility, function or product). Indirect costs may be either fixed or variable. Indirect costs include administration, personnel and security costs.
What are Fixed Costs?
Fixed costs are costs that do not change as the level of output changes in the short run. Therefore, if a firm decided to produce more good or services, its fixed costs would remain the same.
What are Variable Costs?
Variable costs are costs that do change as the level of output changes. Therefore, if a firm decided to increase the production of its goods or services, its variable costs would also increase.
What are Running Costs?
Running costs are the amount of money that is regularly spent on things such as salaries, heating, lighting, and rent ⇒ The aim is to cut running costs by £ 90 million per year.
What are Start-Up Costs?
Start-up costs are costs incurred when setting up a business
What is Sales Revenue(formulae)?
Revenue = Price x Quantity sold
What is Profit (Formulae)?
Profit = revenue - expenditure
