Sales revenue and costs 2.2.2 Flashcards
1
Q
what are ‘sales’
A
the income a business receives over a period of time
2
Q
how to calculate total revenue
A
quantity sold * selling price
3
Q
4 ways a business could increase their sales revenue
A
- increase their quality (can charge more)
- put on a sale (BOGOF)
- introduce a loyalty system
- advertising/marketing
4
Q
how to calculate total cost
A
fixed costs + variable costs
5
Q
how to calculate total variable cost
A
variable cost per unit * quantity
6
Q
what are fixed costs (give an example)
A
costs which do not change when a business changes its output level (e.g. rent, salaries, insurance, mortage)
7
Q
what are variable costs (give an example)
A
costs which alter directly with the business’ level of output (e.g. material costs, packaging, worker’s wages)
8
Q
how could you cut fixed costs
A
- move to a cheaper premises
- change insurance providers
- limit employees
9
Q
how could you cut variable costs
A
- buy materials in bulk
- negotiate prices with suppliers
- make products with less material
10
Q
what are some examples of semi-variable costs
A
- transport
- electricity
- gas
