Unit 31 - Sales, Revenue And Costs Flashcards
Def: average cost or unit cost
The cost of producing one unit calculated by dividing the total cost by the output
Def: fixed cost
A cost that does not change as a result of a change in output in the short run e.g. Repaying loans or role materials.
Def: Long run
The time period we are all factors of production are variable
Def: profit
The difference between total cost and total revenue it can be negative
Def: sales revenue
The value of output sold in a particular time period. It is calculated by price x quantity of output.
Def: sales volume
The quantity of output sold in a particular time period
Def: semi variable cost
A cost that consists of both fixed and variable elements
Def: short to run
The time period we’re at least one factor of production is fixed
Def: total cost
The entire cost of producing a given level of output
Def: total revenue
The amount of money the business receives from selling output
Def: variable cost
A cost that rises as output rises e.g. raw materials can change price
Sales volume equation
Sales volume = sales revenue / price
Sales revenue formula
Sales revenue = sales price x sales volume
What does fixed cost look like on a graph
A horizontal line when cost is y axis and output is x axis
Total variable cost =
Total variable cost = average variable cost x quantity
Total cost =
Total cost = variable cost + fixed cost
Average cost =
Average cost = total cost/output
