Plans held in reserve in case things go wrong - for example, a cash flow forecast based on sales being 10% lower than expected.
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Real Incomes
Changes in household incomes after allowing for changes in prices, i.e. percentage change in household income minus inflation = income.
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Sales Forecast
A method of predicting future sales using statistical methods.
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Trend
The general path that a series of values (for example, sales) follows over time, disregarding variations or random fluctuations.
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Fixed Costs
Those that do to change as the number of sales change (for example, rent or salaries).
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Piece-Rate Labour
Paying workers per item they make - that is, without regular pay.
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Sales Revenue
The number of units sold in a time period, multiplied by the average selling price of those units.
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Sales Volume
The number of units sold in a period of time, e.g. a year.
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Total Costs
All the costs of producing a specific output level, i.e. fixed costs plus total variable costs.
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Total Variable Costs
All the variable costs of producing a specific output level - that is, variable costs per unit multiplied by the number of units sold.
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Variable Costs
Those that change in line with the amount of business (for example, the cost of buying raw materials.
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Break-Even Chart
A line graph showing total revenues and total costs at all possible levels of output or defamed from zero to maximum capacity.
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Contribution
This is total revenue less variable costs. The calculation of contribution is useful for businesses that are responsible for a range of products.
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Fixed Costs
Those that do not change as the number of sales change (for example, rent or salaries).
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Margin of Safety
The amount by which current output exceeds the level of output necessary to break-even.
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Variable Costs
Those that change in line with the amount of business (for example, the cost of buying raw materials).
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Adverse Variance
A difference between budgeted and actual figures that is damaging to the firm's profit (for example, costs up or revenue down).
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Criteria
Yardsticks against which success (or the lack of it) can be measured.
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Delegation
Passing authority down the hierarchy, to allow more junior employees some decision-making power.
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Expenditure Budget
Setting a maximum figure on what a department or manager can spend over a period of time; this is to control costs.
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Favourable Variance
A difference between budgeted and actual figures that boosts a firm's profit.
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Income Budget
Setting a minimum figure for the revenue to be generated by a product, a department or manager.
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Zero Budgeting
Setting all future budgets at £0, to force managers to have to justify the spending levels they say they need in future.
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Forecasting
The art and science of estimating future sales for costs with accuracy.
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Revenue
The value of total sales made by a business within a period, usually one year.
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Costs
The expenses incurred by a firm in producing and selling its products, such as wages and raw materials.
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Break-Even
Compares a firm's revenue with its fixed and variable costs to identify the minimum level of sales needed to cover costs. Break-even is the point at which total fixed costs + total variable costs = total revenue.
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Budget
A target for costs or revenue that a firm or department must aim to reach over a given time period.
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Income Budget
A budget that sets a floor (i.e. a minimum target).
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Expenditure Budget
A budget that sets a ceiling (i.e. a maximum target for costs).
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Other cards in this set
Card 2
Front
Changes in household incomes after allowing for changes in prices, i.e. percentage change in household income minus inflation = income.
Back
Real Incomes
Card 3
Front
A method of predicting future sales using statistical methods.
Back
Card 4
Front
The general path that a series of values (for example, sales) follows over time, disregarding variations or random fluctuations.
Back
Card 5
Front
Those that do to change as the number of sales change (for example, rent or salaries).
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