Finance - Costs & Revenue

What is a cost?

• Something the company receives

• The price of a product

• Something the company must pay

• Something the company sells

Which 3 of these are costs?

• Fixed

• Variable

• Operating

• Revenue

What is an operating cost?

• Something a business pays before the company starts

• Something the company receives

• Something the company pays for their day to day running

• Something the company cant afford

Which 2 of these are examples of start up costs for a small supermarket?

• Stock

• Buy a shop

• Pay wages

• Pay a recruitment agency to recruit staff

Which 2 of these are examples of operating costs for a transport company?

• Buy a Lorry

• Diesel

• Utilities

• Buy a printer

How are operating costs broken down?

• Fixed & Total

• Total & Variable

• Total & Indirect

• Fixed & Variable

Which cost is Fixed?

• Sandwiches

• Ingredients

• Utilities

• Stock

What is a variable cost?

• A cost which does not change

• A cost which they must pay even if they produce nothing

• A cost which changes the more or less the business produces

• A cost the business pays when they start

If Sam's Sandwiches use 25p of material for each sandwich, what will be their variable costs for 10 sandwiches

• 10 x 0.25 = £2.50

• 2.5 x 10 = £25

• 25 x 10 = £250

• 0.25/10 = 2.5p

If fixed costs are £300 and Variable costs for making one sandwich are 50p, how would you work out total costs for 200 sandwiches?

• 200 x 300 x 0.50 = Total Sales

• 300 + 0.5 X 200 = Total Sales

• 200 + 0.5 x 300 = Total Sales

• 300 x 50 + 200 = Total Sales