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11 Cards in this Set
- Front
- Back
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What is revenue, sales revenue or turnover? |
The amount of income received from selling goods or services over a period of time. |
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What is the sum to work out total revenue? |
Price X Quantity = Total revenue |
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What are fixed costs? |
They are costs you pay that do not vary with the output produced by a business, e.g. salaries and business rates. |
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What are variable costs? |
Costs that change directly with the number of products made, e.g. raw materials and labour. |
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How do you work out the variable costs? |
Variable costs = cost of one unit X quantity produced |
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What are total costs? |
All the costs of the business. |
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What is the formula to work out total costs? |
Fixed costs + variable costs = total costs |
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When does profit occur? |
When revenues of a business are greater than its total costs. |
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How do you work out the profit or loss? |
Total revenue - total costs = profit or loss |
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Name 4 ways to increase profits. |
Lower variable costs Lower fixed costs Increase the sales price Increase the quantity of sales |
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Making a loss can have a significant impact on a business. The business might be: |
Unable to repay loans Unable to pay bills such as wages Experiencing cash-flow problems Unable to survive, leading to the business stopping trading |
