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a-level business > THEME 2- Definitions > Flashcards

THEME 2- Definitions Flashcards

1
Q

What is a budget?

A

A quantitative economic plan prepared and agreed in advance

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2
Q

What is meant by budgetary control?

A

A business system that involves making future plans, comparing the actual results with the planned results and investigating the cause of any differences

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3
Q

What is meant by historical figures?

A

Quantitative information based on past trading records often used by businesses when producing budgets

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4
Q

What is meant by a production cost budget?

A

A firms planned production costs for a future period of time

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5
Q

What is a sales budget?

A

A firms planned production costs for a future period of time

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6
Q

What is meant by variance?

A

The difference between actual financial outcomes and those budgeted

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7
Q

What is a variance analysis?

A

The process of calculating variances and attempting to identify their causes

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8
Q

What is meant by Zero-based budgeting?

A

A system of budgeting where no money is allocated for costs or spending unless they can be justified by the fund holder, often a manager (they are given a zero value)

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9
Q

What is amorisation?

A

The writing off of an intangible asset

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10
Q

What is meant by cost of sales?

A

The direct costs of a business

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11
Q

What is exceptional costs?

A

A one off cost, such as a large bad debt

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12
Q

what is gross profit?

A

The difference between revenue/turnover and cost of sales

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13
Q

What is gross profit margin?

A

Gross profit expressed as a % of revenue/turnover

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14
Q

What is operating profit?

A

The difference between gross profit and business overheards, such as selling and administrative expenses

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15
Q

What is an operating profit margin?

A

Operating profit expressed as a % of revenue/turnover

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16
Q

What is net profit? (Profit for the year)

A

The difference between operating profit and interest and exceptional items

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17
Q

What is a net profit margin? (Profit for the year)

A

Net profit after tax, expressed as a % of revenue/turnover

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18
Q

What is a statement of comprehensive income?

A

A financial document showing a company’s income and expenditure over a particular period of time, usually a year

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19
Q

What is revenue/turnover?

A

The total income of a business resulting from sales of goods or services

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20
Q

What is meant by administration?

A

A failing business appoints a specialist to rescue the business or wind it up

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21
Q

What is meant by a external factor?

A

Factors beyond the control of the business causing it to collapse

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22
Q

What is meant by a internal factor?

A

A factor that a business is able to control, which can cause it to collapse

23
Q

What is meant by overtrading?

A

The situation where a business does not have enough cash to support its production and sales, usually because its growing too fast

24
Q

What is “batch production”?

A

A method that involves completing one operation at a time on all units before performing the next

25
Q

What is meant by “capital intensive”?

A

Production methods that make more use of machinery relative to labour

26
Q

What is meant by “capital productivity”?

A

The amount of output each unit of capital (e.g one machine) produces

27
Q

What is cell production?

A

Involves producing a family of products in a small self-contained unit (a cell) within a factory

28
Q

What is meant by “division of labour”?

A

Specialisation in specific tasks or skills by an individual

29
Q

What is downsizing?

A

The process of reducing capacity, usually by laying off staff

30
Q

What is meant by “efficiency”?

A

Producing a level of output where average cost is minimised

31
Q

What is flow production?

A

Large-scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line

32
Q

What is meant by “job production”?

A

A method of production that involves employing all factors to complete one unit of output at a time

33
Q

What is a “kaizen”?

A

A Japanese term that means continuous improvement

34
Q

What is meant by “labour intensive”?

A

Production methods that make more use of labour relative to machinery

35
Q

What is labour productivity?

A

The amount of output each unit of labour (e.g one worker) produces

36
Q

What is meant by “lean production”?

A

An approach to operations that focuses on the reduction of resource use

37
Q

What is outsourcing?

A

Giving work to sub-contractors to reduce costs

38
Q

What is meant by “production”?

A

The transformation of resources into goods or services

39
Q

What is specialisation?

A

In business, the production of a limited range of goods

40
Q

What is standardisation?

A

using uniform resources and activities or producing a uniform product

41
Q

What is capacity utilisation?

A

The use that a business makes of its resources

42
Q

What is it meant by “excess” or “surplur capacity”?

A

When a business has too many resources, such as labour and capital, to produce its desired level of output

43
Q

What is full capacity?

A

The point where a business cannot produce any more capacity

44
Q

What does the term “mothballing” mean?

A

Leaving machines, equipment or building space unused, but maintained, so they could be brought back into use if necessary

45
Q

What is Over-utilisation?

A

The position where a business is running at full capacity and ‘straining’ resources

46
Q

What is rationalisation?

A

Reducing the number of resources, particular labour and capital, put into the production business process, usually undertaken because a business has excess capacity

47
Q

What is under-utilisation?

A

The position where a business is producing at less than full capacity

48
Q

What is meant by ‘buffer stocks’?

A

Stocks that are held as a precaution to cope with unforeseen demand

49
Q

What is ‘kanban’?

A

A card or an object that acts as a signal to move or provide resources in a factory

50
Q

What is meant by ‘lead time’?

A

The time between placing the order of stock and the delivery of goods

51
Q

What is a ‘re-order level’?

A

The level of current stock when new orders are placed

52
Q

What is a ‘re-order quantity’?

A

The amount of stock ordered when an order is placed

53
Q

What is ‘stock rotation’?

A

The flow of stock into and out of storage

54
Q

What is ‘work-in-progress’?

A

Partly finished goods

a-level business (4 decks)

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