definitions

Question 1

adding value

Answer 1

the process of increasing worth of a product or service

Question 2

adverse variance

Answer 2

a difference between actual and budgeted amounts

Question 3

autocratic

Answer 3

management/ leadership style whereby the manager makes all the decisions

Question 4

bank overdraft

Answer 4

borrowings from a bank on a current account which are payable on demand

Question 5

batch production

Answer 5

method of production whereby a number of identical products are produced

Question 6

boston matrix

Answer 6

a model which analyses the product portfolio of a business into 4 categories (stars, cash cows, problem child and dogs

Question 7

branding

Answer 7

the use of a trade name, symbol, logo or other device to differentiate a product or service

Question 8

break-even

Answer 8

the point at which the total sales of a business equal total costs- i.e. the business is making neither a profit nor a loss

Question 9

budget

Answer 9

a detailed plan of income and expenses expected over a certain period of time.

Question 10

business cycle

Answer 10

the changes and fluctuations in economic activity that the economy undergoes over a period of time

Question 11

capacity utilisation

Answer 11

the proportion of total capacity that is used (expressed as a percentage)

Question 12

cash flow

Answer 12

the movements of cash into (inflows) and out of (outflows)a business

Question 13

cash flow

Answer 13

the movements of cash into (inflows) and out of (outflows)a business

Question 14

cash flow forecast

Answer 14

a projection, usually by week or month, of the likely cash inflow and outflows in a business

Question 15

cell production

Answer 15

method of production whereby production is split up into self-contained units

Question 16

centralisation

Answer 16

organisational structure where all decision making is made at the top of the hierarchy

Question 17

competition

Answer 17

the businesses that compete for a share of the market

Question 18

competitiveness

Answer 18

the ability of a business to offer a better product than competitors (as measured by customers)

Question 19

contribution

Answer 19

the difference between total sales and total variable costs

Question 20

demand

Answer 20

the amount of a product or service that customers are willing and able to pay at a given time

Question 21

decentralisation

Answer 21

organisational structure where decision making is passed down the heirarchy

Question 22

democratic

Answer 22

management leadership style whereby the manager involves employees in the decision making process

Question 23

distribution channel

Answer 23

how a business gets its products to the end consumer ( with or without the use of intermediaries)

Question 24

dividend

Answer 24

a payment that is made by a company to its shareholders from the profit earned

Question 25

elasticity of demand

Answer 25

the responsiveness of demand to a change in price or income

Question 26

entrepreneur

Answer 26

a person who sets up a business and assumes all the risks and rewards

Question 27

exchange rates

Answer 27

the rate at which one currency can be converted into another currency

Question 28

favourable variance

Answer 28

a difference between actual and budgeted results which is good news. e.g higher tan budgeted revenue

Question 29

franchise

Answer 29

form of business whereby one business allows another business to sell their products and services in return for a fee

Question 30

fixed costs

Answer 30

costs that do not vary with the level of output

Question 31

flow production

Answer 31

method of production whereby there is a continuous movement of items through the production process