3.2.1

Costs & Revenues

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Costs

Costs are all of the expenses that a business incurs (pays). This involves everything from wages paid to employees to the electricity bills at the business’ premises. The total costs are calculated as the sum of the fixed costs and the variable costs.

Fixed costs

Fixed costs

Fixed costs don't vary as the business changes its output.
- So whether a business produces 10,000 units of a product or 2 units of a product, its fixed costs will be the same.
- Snapchat registering as a business would cost the same regardless of how many adverts they sold or how many users they had.
- Examples include office rent, insurance, and fixed employee salaries.
Note that fixed costs can increase as the business grows.

Variable costs

Variable costs

Variable costs are the costs that change directly with output (they change as a business changes output).
Examples include the wages paid for factory labour, raw materials and transport costs.

Revenue

Revenue is the income earned by a business from the sale of its goods and services.

Revenue

Revenue

Revenue = number of sales x sales price.
- E.g. if a stationery store sells 500 pens for £2 each, then the revenue is £1000 (500 x £2).

1

Business Organisation & Environment

1.1

Introduction to Business Management

1.1.1Why Businesses Exist & Sectors

1.2

Types of Organisation

1.2.1Sole Traders 1.2.2Limited Liability 1.2.3Non-Profit 1.2.4Franchising 1.2.5End of Topic Test - Franchising

1.3

Organisational Objectives

1.3.1External Environments 1.3.2Business Mission & Corporate Objective 1.3.3Mission, Corporate Objectives & Strategy 1.3.4SWOT Analysis 1.3.5End of Topic Test - SWOT Analysis

1.4

Stakeholders

1.4.1Stakeholders

1.5

External Environment

1.5.1Social & Technological Environment 1.5.2Lifestyle & Technological Environment 1.5.3Corporate Social Responsibility 1.5.4Economic Environment 1.5.5Political & Legal Change

1.6

Growth & Evolution

1.6.1Growth & Retrenchment 1.6.2Challenges of Growth 1.6.3Growth Models 1.6.4End of Topic Test - Diseconomies of Scale 1.6.5Internationalisation 1.6.6Sourcing Resources & Entering Markets 1.6.7End of Topic Test - Internationalisation 1.6.8Managing Internationalisation 1.6.9Impact of Internationalisation

1.7

HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools

2

Human Resource Management

2.1

Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives 2.1.2Human Resource Management 2.1.3Labour Turnover & Retention 2.1.4Labour Productivity

2.2

Organisational Structure

2.2.1Organisational Structures

2.3

Leadership & Management

2.3.1Managers 2.3.2Management Theories 2.3.3End of Topic Test - Management

2.4

Motivation

2.4.1Motivating & Engaging Employees 2.4.2Taylor's Theory 2.4.3Maslow's Theory 2.4.4Herzberg's Theory 2.4.5Different Incentives 2.4.6Evaluating Incentives

2.5

Organisational (Corporate) Culture

2.5.1Managing Organisational Culture 2.5.2Organisational Structures

2.6

HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations 2.6.2Case Study - The Winter of Discontent

3

Finance & Accounts

3.1

Sources of Finance

3.1.1Internal Sources of Finance 3.1.2External Sources of Finance 3.1.3Factors for Financing 3.1.4End of Topic Test - Debt

3.2

Costs & Revenues

3.2.1Costs & Revenues

3.3

Break-Even Analysis

3.3.1Profit 3.3.2Break-Even Analysis

3.4

Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis

3.5

Cash Flow

3.5.1Cash Flow 3.5.2Solutions to Cash Flow Problems 3.5.3Improving Cash Flow & Profits

3.6

HL Only: Investment Appraisal

3.6.1Investment Appraisal

3.7

HL Only: Budgets

3.7.1Cash-Flow & Budgets

4

Marketing

4.1

The Role of Marketing

4.1.1Setting Marketing Objectives 4.1.2Market Calculations

4.2

Marketing Planning

4.2.1Marketing Mix 4.2.2Segmentation 4.2.3Niche & Mass Markets

4.3

Market Research

4.3.1Market Research 4.3.2Market Mapping 4.3.3Methods of Market Research

4.4

The 4 Ps

4.4.1Product Decisions 4.4.2Pricing Decisions & Price Skimming 4.4.3Pricing Decisions & Price Penetration 4.4.4End of Topic Test - Pricing & Competition 4.4.5Promotional Decisions 4.4.6Promotional Decisions 2 4.4.7Promotional Decisions 3 4.4.8Digital Marketing 4.4.9Evaluating Digital Marketing 4.4.10Case Study - The Marketing Mix & Promotion 4.4.11Place & Distribution

4.5

HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix

4.6

HL Only: International Marketing

4.6.1International Marketing

4.7

E-Commerce

4.7.1E-Commerce

5

Operations Management

5.1

The Role of Operations Management

5.1.1Setting Operational Objectives

5.2

Production Methods

5.2.1Production Processes Overview 5.2.2Production Processes 5.2.3Production Efficiency 5.2.4Technology & Production

5.3

HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality 5.3.2Measuring & Identifying Quality 5.3.3Total Quality Management 5.3.4Evaluating Total Quality Management 5.3.5Case Study - Toyota Production System

5.4

HL Only: Production Planning

5.4.1Capacity 5.4.2Productivity & Efficiency 5.4.3Technology & Efficiency 5.4.4Improving the Supply Chain 5.4.5Inventory 5.4.6Outsourcing

5.5

HL Only: Research & Development

5.5.1Organisational Planning Tools

Jump to other topics

1

Business Organisation & Environment

1.1

Introduction to Business Management

1.1.1Why Businesses Exist & Sectors

1.2

Types of Organisation

1.2.1Sole Traders 1.2.2Limited Liability 1.2.3Non-Profit 1.2.4Franchising 1.2.5End of Topic Test - Franchising

1.3

Organisational Objectives

1.3.1External Environments 1.3.2Business Mission & Corporate Objective 1.3.3Mission, Corporate Objectives & Strategy 1.3.4SWOT Analysis 1.3.5End of Topic Test - SWOT Analysis

1.4

Stakeholders

1.4.1Stakeholders

1.5

External Environment

1.5.1Social & Technological Environment 1.5.2Lifestyle & Technological Environment 1.5.3Corporate Social Responsibility 1.5.4Economic Environment 1.5.5Political & Legal Change

1.6

Growth & Evolution

1.6.1Growth & Retrenchment 1.6.2Challenges of Growth 1.6.3Growth Models 1.6.4End of Topic Test - Diseconomies of Scale 1.6.5Internationalisation 1.6.6Sourcing Resources & Entering Markets 1.6.7End of Topic Test - Internationalisation 1.6.8Managing Internationalisation 1.6.9Impact of Internationalisation

1.7

HL Only: Organisational Planning Tools

1.7.1Organisational Planning Tools

2

Human Resource Management

2.1

Functions & Evolution of Human Resource Management

2.1.1Setting Human Resource Objectives 2.1.2Human Resource Management 2.1.3Labour Turnover & Retention 2.1.4Labour Productivity

2.2

Organisational Structure

2.2.1Organisational Structures

2.3

Leadership & Management

2.3.1Managers 2.3.2Management Theories 2.3.3End of Topic Test - Management

2.4

Motivation

2.4.1Motivating & Engaging Employees 2.4.2Taylor's Theory 2.4.3Maslow's Theory 2.4.4Herzberg's Theory 2.4.5Different Incentives 2.4.6Evaluating Incentives

2.5

Organisational (Corporate) Culture

2.5.1Managing Organisational Culture 2.5.2Organisational Structures

2.6

HL Only: Industrial/Employee Relations

2.6.1Improving Employer-Employee Relations 2.6.2Case Study - The Winter of Discontent

3

Finance & Accounts

3.1

Sources of Finance

3.1.1Internal Sources of Finance 3.1.2External Sources of Finance 3.1.3Factors for Financing 3.1.4End of Topic Test - Debt

3.2

Costs & Revenues

3.2.1Costs & Revenues

3.3

Break-Even Analysis

3.3.1Profit 3.3.2Break-Even Analysis

3.4

Profitability & Liquidity Ratio Analysis

3.4.1Profitability Analysis

3.5

Cash Flow

3.5.1Cash Flow 3.5.2Solutions to Cash Flow Problems 3.5.3Improving Cash Flow & Profits

3.6

HL Only: Investment Appraisal

3.6.1Investment Appraisal

3.7

HL Only: Budgets

3.7.1Cash-Flow & Budgets

4

Marketing

4.1

The Role of Marketing

4.1.1Setting Marketing Objectives 4.1.2Market Calculations

4.2

Marketing Planning

4.2.1Marketing Mix 4.2.2Segmentation 4.2.3Niche & Mass Markets

4.3

Market Research

4.3.1Market Research 4.3.2Market Mapping 4.3.3Methods of Market Research

4.4

The 4 Ps

4.4.1Product Decisions 4.4.2Pricing Decisions & Price Skimming 4.4.3Pricing Decisions & Price Penetration 4.4.4End of Topic Test - Pricing & Competition 4.4.5Promotional Decisions 4.4.6Promotional Decisions 2 4.4.7Promotional Decisions 3 4.4.8Digital Marketing 4.4.9Evaluating Digital Marketing 4.4.10Case Study - The Marketing Mix & Promotion 4.4.11Place & Distribution

4.5

HL Only: The Extended Marketing Mix

4.5.1The Extended Marketing Mix

4.6

HL Only: International Marketing

4.6.1International Marketing

4.7

E-Commerce

4.7.1E-Commerce

5

Operations Management

5.1

The Role of Operations Management

5.1.1Setting Operational Objectives

5.2

Production Methods

5.2.1Production Processes Overview 5.2.2Production Processes 5.2.3Production Efficiency 5.2.4Technology & Production

5.3

HL Only: Lean Prodution & Quality Management

5.3.1Importance of Quality 5.3.2Measuring & Identifying Quality 5.3.3Total Quality Management 5.3.4Evaluating Total Quality Management 5.3.5Case Study - Toyota Production System

5.4

HL Only: Production Planning

5.4.1Capacity 5.4.2Productivity & Efficiency 5.4.3Technology & Efficiency 5.4.4Improving the Supply Chain 5.4.5Inventory 5.4.6Outsourcing

5.5

HL Only: Research & Development

5.5.1Organisational Planning Tools

Practice questions on Costs & Revenues

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

1
Which of the following is NOT an example of a fixed cost?Multiple choice
2
Types of costs:Fill in the list
3
Which of the following is true about costs?Multiple choice
4
Which of the following is the correct calculation for revenue?Multiple choice
5
If a sweet shop sells 700 sweets for 15p each, what is the shop's revenue?Multiple choice

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End of Topic Test - Debt

Profit