Sales, Revenue and cost

• What is sales volume

  Output produced by a business that is eventually sold.

  Number of units sold
• Examples of units that can be sold

  Flight Number

  Cars

  Food

  Hotel guests

  Clothing brands

  Music downloads
• What is sales revenue

  Value of the output sold by the business
• Equation for sales revenue

  Price x quantity of output
• Examples of costs

  Wages

  Rent

  Training

  Insurance
• What is fixed cost

  Costs which stay the same at all levels of output in the short term.

  Remains the same no matter how much product is sold
• What is stepped fixed cost

  Business at full capacity that needs to expand
• What is variable cost

  Cost that varies with the level of output

  E.g production, sales, sale delivery
• Total variable cost equation

  Variable cost x quantity
• Variable cost per unit equation

  Total variable cost/quantity
• What is semi variable costs

  costs that dont fit directly into fixed or variable costs
• total cost equation

  Fixed cost + variable cost
• What is a direct cost

  Costs that can be identified with a particular product
• What is a indirect cost

  Result from the whole business.

  Not associated with a specific product
• Average cost (unit cost) equation

  Total cost/output
• Profit equation

  Total revenue - total cost