formulas

Question 1

profit

Answer 1

total revenue - total costs

Question 2

labour turnover

Answer 2

amount of employees leaving / amount employed x 100

Question 3

total costs

Answer 3

fixed costs + variable costs

Question 4

total revenue

Answer 4

price x quantity

Question 5

capacity utilisation

Answer 5

actual/maximum x 100

Question 6

market growth

Answer 6

change in size of market / size of market x 100

Question 7

sales growth

Answer 7

change of sales of a product / sales of product x 100

Question 8

market share

Answer 8

sales of one product / total sales in the market x 100

Question 9

market capitalisation

Answer 9

number of shares x share price

Question 10

total variable costs

Answer 10

variable cost per unit x output

Question 11

price elasticity of demand

Answer 11

change in quantity/change in price x 100

Question 12

added value

Answer 12

sales revenue - costs of goods and services

Question 13

labour productivity

Answer 13

output / number of employees

Question 14

unit costs

Answer 14

total costs / output

Question 15

contribution per unit

Answer 15

selling price - variable costs per unit

Question 16

total contribution

Answer 16

total revenue - total variable costs

Question 17

labour costs per unit

Answer 17

labour costs / output

Question 18

breakeven output

Answer 18

fixed costs / contribution per unit

Question 19

margin of safety

Answer 19

actual output - breakeven output

Question 20

gross profit margin

Answer 20

gross profit / sales revenue x 100

Question 21

profit for a year margin

Answer 21

profit for a year / sales revenue x 100

Question 22

physiological pricing

Answer 22

when a company sell for £9.99 instead of £10

Question 23

loss leadership (supermarkets)

Answer 23

a firm will set all their products cheaper in order to buy more (supermarkets often do this)

Question 24

price skimming

Answer 24

a high price is set to achieve a high profit margin

Question 25

price penetration

Answer 25

a low price is set for a sudden spurt in the market

Question 26

price leadership and price takers

Answer 26

a large firm will set a market price and price taker follow the price

Question 27

predator

Answer 27

a firm will set very low prices to drive other companies out the market

Question 28

disadvantages of a piece pay rate system

Answer 28

if quantity is the main focus, quality will lack

don’t get paid when sick or injured

Question 29

advantages of piece pay rate system

Answer 29

employers will be more efficient

Question 30

why is breakeven important

Answer 30

breakeven is important because it helps to determine costs structures and the umber of units needed to be sold to cover all costs and make profit

Question 31

whats the niche market

Answer 31

niche market is a section of the market specified for a specific product or service
e.g. vegans

Question 32

whats primary data research

Answer 32

date collected first hand for a specific purpose

Question 33

whats secondary data research

Answer 33

data that already exists

Question 34

how to manage employees

Answer 34

set goals
have an open door policy
give employees the right training and support

Question 35

why are budgets useful

Answer 35

budgets can help business focus on cash flow