1.3.2 Business Revenues, Costs, and Profits

    Cards (45)

    • Fixed costs change with the level of output.
      False
    • Match the cost type with its example:
      Fixed Costs ↔️ Rent, insurance
      Variable Costs ↔️ Raw materials, wages
      Semi-Variable Costs ↔️ Utility bills
    • What is the formula for calculating total costs?
      Fixed\ Costs + Variable\ Costs</latex>
    • Fixed costs do not change with the level of output.

      True
    • What are fixed costs in business terms?
      Costs that do not change
    • Variable Costs increase as production levels change.
      True
    • What is the formula for Average Costs?
      Average Costs=Average\ Costs =Total CostsNumber of Units Produced \frac{Total\ Costs}{Number\ of\ Units\ Produced}
    • The formula for profit is **Profit = Revenue - Costs**
    • Match the profit type with its definition and formula:
      Gross Profit ↔️ Revenue after deducting COGS ||| Gross Profit=Gross\ Profit =RevenueCOGS Revenue - COGS
      Net Profit ↔️ Revenue after deducting all expenses ||| Net Profit=Net\ Profit =Gross ProfitAll Other Expenses Gross\ Profit - All\ Other\ Expenses
    • Understanding the relationship between revenue, fixed costs, and variable costs is crucial for maximizing profitability.

      True
    • What is the definition of business revenues?
      Income from selling goods
    • What do business revenues refer to?
      Total money from sales
    • Variable costs increase or decrease as production levels change
    • What is the formula for calculating average costs?
      Total CostsNumber of Units Produced\frac{Total\ Costs}{Number\ of\ Units\ Produced}
    • Match the cost type with its characteristic:
      Fixed Costs ↔️ Constant regardless of production
      Variable Costs ↔️ Changes with production
    • What are variable costs in business terms?
      Costs that change with production
    • Average Costs are calculated by dividing the Total Costs by the number of units produced
    • What does revenue represent in a business?
      Total income from sales
    • What is the formula for profit in simple terms?
      Profit=Profit =RevenueCosts Revenue - Costs
    • Match the business cost type with its definition and example:
      Fixed Costs ↔️ Costs that do not change with output ||| Rent, insurance, administrative salaries
      Variable Costs ↔️ Costs that change directly with output ||| Raw materials, packaging, production wages
      Semi-Variable Costs ↔️ Costs with fixed and variable components ||| Utility bills (base charge plus usage)
    • Fixed costs change with the level of output.
      False
    • What is an example of a fixed cost for a business?
      Rent
    • What is the formula for calculating average costs?
      TotalCostsNumber of Units Produced\frac{Total Costs}{Number\ of\ Units\ Produced}
    • Match the profit type with its definition:
      Gross Profit ↔️ Revenue after deducting COGS
      Net Profit ↔️ Revenue after deducting all expenses
    • Net profit indicates a business's financial performance after covering all expenses.

      True
    • Variable costs change directly with the level of output
    • Fixed costs remain constant even if the business doesn't produce anything.

      True
    • Average costs are calculated by dividing total costs by the number of units produced
    • Variable costs change directly with the level of output
    • Fixed Costs remain constant even if the business doesn't produce anything
    • Steps to calculate Total Costs
      1️⃣ Identify Fixed Costs
      2️⃣ Identify Variable Costs
      3️⃣ Add Fixed Costs and Variable Costs
    • Understanding the relationship between fixed, variable, and total costs is crucial for effective cost management.

      True
    • Profit is calculated by subtracting costs from revenue.

      True
    • If a company has Revenue of $100,000 and Expenses of $60,000, its Profit is $40,000
    • What are fixed costs in the context of profit and loss analysis?
      Costs that do not change
    • Business revenues can come from sources such as product sales and service delivery
    • Understanding cost types helps businesses make informed decisions about pricing, production, and resource allocation
    • Total costs are calculated by summing fixed costs and variable costs
    • What is the formula for calculating profit?
      Profit=Profit =BusinessRevenuesBusinessCosts Business Revenues - Business Costs
    • What does COGS stand for?
      Cost of Goods Sold
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