Business Functions --> accounting/finance 2

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  • Created by: Ali Bland
  • Created on: 05-03-15 19:04
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  • Business Functions --> Accounting/ Finance 2
    • Different types of costs
      • Unit costs
        • Cost of producing one unit
      • Fixed costs or indirect costs
        • Costs that are not directly related to the level of output
      • Variable costs or direct costs
        • Costs that are directly related to the level of output
    • Marginal cost
      • The increase in variable cost
      • The cost of producing each extra unit
    • Contribution costing
      • The amount each unit of productions contributing to the overheads of the business
      • Contribution per unit = selling price - variable costs per unit
      • Total contribution = contribution per unit x number sold
    • Types of goods
      • Normal
        • As income rises the quantity demanded rises
      • Inferior
        • As income rises the quantity demanded falls
    • Income elasticity of demand (YED)
      • YED means how demand responds to change in income
    • Margin of safety
      • The difference between the actual level of output and the break even point

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