Business Studies A1 and A2
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Business Studies A1 and A2
1 Costs
1.1 Direct costs ( Variable Costs)
1.1.1 These are costs that are directly related to the production process.
1.2 Indirect costs ( Fixed Costs)
1.2.1 These are costs that cannot be directly related to the production process.
1.3 This is what a business spends its money on, such as wages and materials.
1.4 Start-up costs
1.4.1 When a business starts up, money needs to be raised to allow the business to start trading. However these are one off costs.
2 Total costs
2.1 The formula for total costs is:
2.1.1 Total costs = Fixed costs + Variable costs
2.2 In order to work out the total costs you need to:
2.2.1 Multiply the variable cost per unit by the number made / sold.
2.2.2 Add that total ( the variable costs that are mentioned above) to the fixed costs.
3 Revenue
3.1 This is all the money coming into the business ( the income ) from selling its goods and services.
3.2 Sources of revenue:
3.2.1 This is the various ways in which a business can recieve income.
3.3 The formula for revenue is :
3.3.1 Revenue = number of sales x price per unit
4 Expenditure
4.1 This is the money that business pays out . ( COSTS)
4.2 Overheads
4.2.1 Overheads is the everyday running costs of a business
4.3 Types of expenditure include:
4.3.1 Utility bills
4.3.2 Telephone bills
4.3.3 General maintenace costs
4.3.4 Wages
5 Investment
5.1 This is putting money into something with the expectation of a gain.
6 Security
6.1 These are assets that the business owner pledges to the bank in oreder to recieve a business loan.
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