Revenue & Expenditure Flashcards
Fixed Costs
Costs that do not vary with output in the short run, e.g. utilities and rent.
Variable Costs
Costs of the business that vary directly with the output in the short run, e.g. raw materials and packaging.
Semi-Variable Costs
Costs that combine elements of fixed and variable costs.
Capital Expenditure
Money spent by a business or organisation on acquiring or maintaining fixed assets such as land, buildings and equipment. These are classed as capital and therefore cannot be fixed or variable.
Revenue Expenditure
Money spent by a business or organisation on their day-to-day expenses, these are business’ fixed and variable costs.
Total Costs
Total Costs = Fixed Costs + Variable Costs
Variable Cost Per Unit
The variable cost it takes to make one sell one product.
Total Variable Cost
Total Variable Cost = Variable Cost Per Unit x Quantity Sold
Revenue
The value of all sales within the business over a period of time.
Revenue Equation
Revenue = Price Per Product x Quantity Sold
Profit
Financial gain from running a business - the difference between what is earned and what is spent.
Profit/Loss
Profit/Loss = Revenue - Total Costs
