SAC Revision 3 Flashcards
Explain what is meant by fixed equipment costs and provide two examples
Costs incurred on items that involve a relatively large outlay of money.
Motor vehicles
Buildings land
Explain what is meant by start up costs and provide two examples
Once only costs that occur at the commencement of the business.
Rent in advance
Start up fees
Explain what is meant by operating costs and provide two examples
Cost incurred as part of the day-to-day running of the business.
Wages
Advertising
From what source might each of the following ownership obtain finance: sole proprietorship, partnership, company’s
Sole proprietorship-
Owners personal savings or could be borrowed
Partnership-
Personal savings or borrowed
Company-
Shares, borrowed from bank
Identify and explain any two conditions that may be attached to a loan for a small business
Security- the provision of security that can be claimed by the lender if the loan conditions are not met
Reports- the provision of regular or random reports on the progress of the business
Identify the four Ps
Product
Price
Place
Promotion
Provide three differences between product an a service
Goods-
- Tangible meaning they’re physical and can not be touched
- Little consumer involvement
- Can be stored
Service-
- Are intangible which means they cannot be touched
- Customers may need to be present when the service is being delivered
- Cannot be stored
Identify three main strategies of cost
- fixed cost
- start up cost
- operating cost
Identify and explain two printing strategies
Cost pricing- calculate all of your costs and add desired profit
Demand pricing-
Involves finding out how much a customer will pay.
Explain any two promotion strategies
Advertising- such as pop ups on computers, TV ads, maiming media, this is where most things are viewed which is a great promotion for the business
Samples- give people small, free portions of a product so they come back for more
Identify two place strategies
Direct distribution- the product goes straight from the manufacture to the customer
Indirect distribution-product goes from the manufacturer to the retailer then the customer
How can performance of an organisation be measured?
Performance indicator in light of objectives and goals
Define performance indicator
The performance of a business measured by financial and non financial indicators
Explain two financial performance indicators
Profit and loss statement- how much money the company is making compared to losing
Return on total assets- money compared to all assets owned
Two non financial preformance indicators
Product or service design- the product quality
Marketing and sales- meeting the customers needs and satisfying them
