Revenue/costs Flashcards
Revenue
The income the business receives from Serling goods /services
Revenue equation
Number of sales / price per unit
Another way an enterprise can receive revenue from
Interest paid on saving
Rent out a property or office space
Invest in other companies
Selling assets
Costs are divided into
Start up costs and running costs
Start up costs
Items that are needed before the business can start trading
Running costs
These are day to day costs of running the business once it has started
Total costs equation
Fixed costs + variable costs
Profit
Total revenue - total costs
Running costs are divided into
Fixed costs and variable costs
Fixed costs (indirect costs)
Has to be paid no matter how many sales a business makes
Rent,salary, business rates, loan repayments, insurance
Variable costs (direct costs)
Vary depending on the amount of goods sold or produced
Stock, packaging, fuel
Variable costs calculated by
Amount of goods or products produced/ costs for one good or product
Gross profit
Turnover - cost of sales
Net profit
Gross profit - expenses
