What is business? Flashcards
1
Q
Why businesses exist
A
Made by entrepreneurs Exist in order to earn a return Create and sustain employment Drive innovation Contribute to infrastructure Create wealth
2
Q
Mission and objectives
A
Reason for existence
Vision for the future
Differentiates
3
Q
Common business objectives
A
Objectives are statements of specific outcomes that are to be achieved
4
Q
Measure and importance of profit
A
The reward or return for taking risks & making investments.
Total Sales - Total Costs
5
Q
Revenue (also turnover and sales)
A
Total revenue = volume sold x average selling price
6
Q
Business costs
A
Variable Costs (Raw material, wages) Fixed Costs (Rent, salaries)
7
Q
Fixed costs, variable costs and total costs
A
Fixed Costs - do not change in relation to output. They do change - but not as a consequence of output changing.
Variable Costs - costs which change as output varies.
