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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
Q

Downsizing

A

The process of reducing capacity, usually by laying off staff

26
Q

Efficiency

A

Producing a level of output where average cost is minimised

27
Q

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

28
Q

Job production

A

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

29
Q

Kaizen

A

A Japenese term that means continuous improvement

30
Q

Labour intensive

A

Production methods that make more use of labour relative to machinery

31
Q

Labour productivity

A

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

32
Q

Lean production

A

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

33
Q

Outsourcing

A

Giving work to sub-contractors to reduce costs

34
Q

Production

A

The transformation of resources into goods or services

35
Q

Productivity

A

The output per unit of input per time period

36
Q

Specialisation

A

In business, the production of a limited range of goods

37
Q

Standardisation

A

Using uniform resources and activities or producing a uniform product

38
Q

Buffer stocks

A

Stocks held as a precaution to cope with unforeseen demand

39
Q

Kanban

A

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

40
Q

Lead time

A

The time between placing the order and the delivery of goods

41
Q

Re-order level

A

The level of current stock when new orders are placed

42
Q

Re-order quantity

A

The amount of stock ordered when an order is placed

43
Q

Stock rotation

A

The flow of stock into and out of storage

44
Q

Work-in-progress

A

Partly finished goods

45
Q

Quality

A

Features of a product that allow it to satisfy customers’ needs. It may refer to some standard of excellence

46
Q

Quality Assurance

A

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
Q

Quality Chains

A

When employees form a series of links between customers and suppliers in business, both internally and externally

48
Q

Quality Circles

A

Groups of workers meeting regularly to solve problems and discuss work issues

49
Q

Quality Control

A

Making sure that the quality of a product meets specified quality performance criteria

50
Q

Statistical Process Control

A

The collection of data about the performance of a particular process in a business

51
Q

Total Quality Management (TQM)

A

A managerial approach that focuses on quality and aims to improve the effectiveness, flexibility and competitiveness of the business

52
Q

Anti-competitive/restrictive pracctices

A

Attempts by firms to prevent or restrict competition

53
Q

Barriers to entry

A

Obstacles that make it difficult for new firms to enter a market

54
Q

Collusion

A

Two (or more) businesses agreeing to a restrictive practice, such as price fixing

55
Q

Contract of employment

A

A written agreement between an employer and an employee in which each has certain obligations

56
Q

Discrimination

A

Favouring one person over another. For example, in the EU it is unlawful to discriminate on grounds of race, gender, age and disability

57
Q

Employment tribunal

A

A court that deals with cases involving disputes between employers and employees

58
Q

National Minimum Wage

A

A wage rate set by the government below which it is illegal to pay people at work

59
Q

Unfair dismissal

A

The illegal dismissal of a worker by a business

60
Q

Cartel

A

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
Q

Colluding

A

In business, where several businesses make agreements among themselves which benefit them at the expense of either rival businesses or customers

62
Q

Market structures

A

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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