LO2 Key words+ formulae

A fixed cost is a cost that does not vary with output.

• True

• False

The money received from customers when they pay for goods is called sales revenue.

• False

• True

An example of a variable cost is rent.

• True

• False

Sales revenue is a business cost.

• True

• False

An example of a variable cost in Brian’s business is packaging.

• True

• False

If you charge a low price, a customer will always buy your product.

• True.

• False

This is the term given to how many products/services a business produces.

• Output

• Cost

• Fixed Cost

• Variable cost

The things a business has to pay for in order to start-up and operate on a daily basis.

• Output

• Costs

• Profit

• Revenue

Costs that do not change depending on output

• Variable costs

• Fixed costs

• Total costs

• Output

These are the costs that change based on output.

• Fixed costs

• Variable costs

• Output