sales,revenue and costs Flashcards
whats sales volume
number of sales a business has made
calculation for sales volume
total sales revenue/selling price per unit
whats sales revenue
amount of money the business makes frim the sales of a product or service
calculation for sales revenue
price x quantity of output
what helps decision making
accurate and reliable cost information
what is a short run cost
the period of time when at least one factor of production is fixed
what is long run
all factors of production can vary
what are fixed costs
costs that stay the same no matter the output in the short term
examples of fixed costs
council tax
insurance
rent
electricity
why might fixed costs increase
inflation
whats a variable cost
costs which change depending on output
examples of variable costs
raw materials
fuel
packaging
wages
what are semi-variable costs
costs that have both fixed and variable elements
examples of semi variable costs
labour
telephone costs
annual interest calculation
total loan amount x interest rate
total cost calculation
fixed + variable
2 types of costs
direct and indirect
what are direct costs
can be identified with a particular product or process
examples of direct costs
raw materials
packaging
direct labour
what are indirect costs
costs derived from overhead charges
examples of indirect costs
rent
insurance
salaries of office staff
audit fees
what are average unit costs
cost per unit of production
average cost calculation
total cost/ output
profit/loss calculation
total revenue- total costs
