Costs & Sales Flashcards
Total Costs Formula
Total Costs = Fixed Costs + Variable Costs + Semi-Variable Costs
Fixed Costs
- Stay the same
- Incurred by the business regardless of how well it is doing e.g. business rates
Variable Costs
- Changing costs
- Incurred when the business increases activity or output e.g. raw materials
Total Variable Cost = Variable Cost Per Unit X Quantity
Semi-Variable Costs
- Fixed costs which become variable once a certain level of output is reached
E.g. Fixed phone line rental plus variables change based on the number of calls made
Sales
Sales by a business generate revenue; this is cash coming into the business
Total Revenue
Total amount of money coming in from sales
Quantity Sold x Selling Price
Total Sales
The amount of sales made in a set time period , can be expressed as a value or volume
Selling Price Per Unit
The amount a customer pays for each unit bought
Sales In Value
Sales expressed in monetary value e.g. £s
Quantity Sold x Selling Price Per Unit
Sales In Volume
Sales expressed as a quantity e.g. tons or units
Profit Formula
Profit = Total Revenue (TR) - Total Cost (TC)
Break-Even Point Formula
Break Even Point = Fixed Costs / Selling Price - Variable Costs Per Unit
Contribution Per Unit Formula
Contribution Per Unit = Selling Price - Variable Costs Per Unit
Total Contribution Formula
Total Contribution = Sales Revenue - Total Variable Costs
Total Variable Cost Formula
Total Variable Cost = Variable Cost Per Unit x Quantity
