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Edexcel A Level Business > Theme 2 Key Terms > Flashcards

Theme 2 Key Terms Flashcards

1
Q

Budget

A

A quantitative economic plan prepared and agreed in advance

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2
Q

Budgetary control

A

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

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3
Q

Historical figures

A

Qualitative information based on past trading records

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4
Q

Production cost budget

A

A firm’s planned production costs for a future period of time

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5
Q

Sales budget

A

A firm’s planned sales for a future period of time

Can be measured in terms of volume or revenue

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6
Q

Variance

A

The difference between actual financial outcomes and those budgeted

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7
Q

Variance analysis

A

The process of calculating variances and attempting to identify their causes

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8
Q

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 (they are given a zero value)

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9
Q

Amortisation

A

The writing off of an intangible asset

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10
Q

Cost of sales

A

The direct costs of a business

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11
Q

Exceptional costs

A

A one-off cost, such as a large bad debt

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12
Q

Gross profit

A

The difference between revenue/turnover and cost of sales

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13
Q

Gross profit margin

A

Gross profit expressed as a percentage of revenue/turnover

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14
Q

Operating profit

A

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

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15
Q

Operating profit margin

A

Operating profit expressed as a percentage of revenue/turnover

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16
Q

Profit for the year (net profit)

A

The difference between operating profit and interest and exceptional items

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17
Q

Profit for the year (net profit) margin

A

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

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18
Q

Statement of comprehensive income

A

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

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19
Q

Revenue or turnover

A

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

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20
Q

Batch Production

A

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

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21
Q

Capital Intensive

A

Production methods that make more use of machinery relative to labour

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22
Q

Capital productivity

A

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

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23
Q

Cell production

A

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

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24
Q

Division of labour

A

Specialisation in specific tasks or skills by an individual

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25
Downsizing
The process of reducing capacity, usually by laying off staff
26
Efficiency
Producing a level of output where average cost is minimised
27
Flow production
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
28
Job production
A method of production that involves employing all factors to complete one unit of output at a time
29
Kaizen
A Japenese term that means continuous improvement
30
Labour intensive
Production methods that make more use of labour relative to machinery
31
Labour productivity
The amount of output of each unit of labour (e.g. one worker) produces
32
Lean production
An approach to operations that focuses on the reduction of resource use
33
Outsourcing
Giving work to sub-contractors to reduce costs
34
Production
The transformation of resources into goods or services
35
Productivity
The output per unit of input per time period
36
Specialisation
In business, the production of a limited range of goods
37
Standardisation
Using uniform resources and activities or producing a uniform product
38
Buffer stocks
Stocks held as a precaution to cope with unforeseen demand
39
Kanban
A card or object that acts as a signal to move or provide resources in a factory
40
Lead time
The time between placing the order and the delivery of goods
41
Re-order level
The level of current stock when new orders are placed
42
Re-order quantity
The amount of stock ordered when an order is placed
43
Stock rotation
The flow of stock into and out of storage
44
Work-in-progress
Partly finished goods
45
Quality
Features of a product that allow it to satisfy customers' needs. It may refer to some standard of excellence
46
Quality Assurance
A method of working for businesses that takes into account customers' wants when standardising quality. It often involves guaranteeing that quality standards are met
47
Quality Chains
When employees form a series of links between customers and suppliers in business, both internally and externally
48
Quality Circles
Groups of workers meeting regularly to solve problems and discuss work issues
49
Quality Control
Making sure that the quality of a product meets specified quality performance criteria
50
Statistical Process Control
The collection of data about the performance of a particular process in a business
51
Total Quality Management (TQM)
A managerial approach that focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business
52
Anti-competitive/restrictive pracctices
Attempts by firms to prevent or restrict competition
53
Barriers to entry
Obstacles that make it difficult for new firms to enter a market
54
Collusion
Two (or more) businesses agreeing to a restrictive practice, such as price fixing
55
Contract of employment
A written agreement between an employer and an employee in which each has certain obligations
56
Discrimination
Favouring one person over another. For example, in the EU it is unlawful to discriminate on grounds of race, gender, age and disability
57
Employment tribunal
A court that deals with cases involving disputes between employers and employees
58
National Minimum Wage
A wage rate set by the government below which it is illegal to pay people at work
59
Unfair dismissal
The illegal dismissal of a worker by a business
60
Cartel
A group of businesses (or countries) which join together to agree on pricing and output in a market in an attempt to gain higher profits at the expense of customers
61
Colluding
In business, where several businesses make agreements among themselves which benefit them at the expense of either rival businesses or customers
62
Market structures
The characteristics of a market, such as the size of the barriers to entry in the market, the number of businesses in the market or whether they produce identical products, which determine the behaviour of businesses within the market

Edexcel A Level Business (4 decks)

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