deck_15726537 Flashcards

1
Q

What are costs?

A

The amount that has to be spent to purchase the resources that are necessary to produce or sell a product.

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2
Q

What are the four types of costs?

A

Fixed and direct, fixed and indirect, variable and direct, variable and indirect.

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3
Q

What are fixed costs?

A

Costs that a business has to pay regardless of how much it produces or sells(rent, interest, advertising, salaries, security etc).

refer to graphs on fixed costs vs output

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4
Q

What are variable costs?

A

Costs that change in proportion to output(raw materials, piece-rate wages).

refer to graphs on variable costs vs output

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5
Q

What are direct costs?

A

Costs specifically related to a project or product(consultancy costs, mortgage fees, etc)

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6
Q

What are indirect costs?

A

Costs that cannot be traced to any particular product(rent, advertising)

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7
Q

What is revenue?

A

Money coming in from product(goods or services) sales. Total revenue = product price x quantity. Average revenue = Total revenue/quantity. Price = Average revenue

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8
Q

What are revenue streams?

A

Means other than trading activity used to generate income for the organisation.

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9
Q

What are some examples of revenue streams?

A

Dividends(return on investment on investing in an organisation), interest or deposits, merchandise, donations, sponsorship deals, advertising revenue, subscriptions, royalties, rental income

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