Business 0.0 / 5 ? BusinessDefinitions and EquationsBTEC NationalNone Created by: catherine.flashmanCreated on: 28-03-16 17:39 What are fixed costs? Fixed Costs are costs that stay the same no matter how many items are made. eg. Rent. 1 of 9 What are variable costs? Variable Costs are costs that change depending on how many items are made. eg. wages. 2 of 9 What are direct costs? Direct Costs are costs that can be linked to the production of an item. eg. raw materials. 3 of 9 What are operating costs? Operating Costs are also known as running costs. They are paid to keep the business working on a day to day basis. eg. electricity 4 of 9 What is profit? Profit is when revenue is higher than expenditure meaning the business has spare money left over. 5 of 9 What is the margin of safety? The margin of safety is the difference between the target sales and breakeven point that the business has. 6 of 9 What is the formula for margin of safety? actual level of sales-breakeven point=margin of safety 7 of 9 How do work out profit? revenue-expenditure=profit 8 of 9 What is the formula for loss? revenue-expenditure=loss 9 of 9
Comments
No comments have yet been made