Cost, revenue, profit, breakeven

• What are fixed costs?

  Cost that do not change with outputs.
• Examples of fixed costs?

  Rent, utilities, insurance, salary, loans, advertising.
• What are variable costs?

  Costs which do change with output.
• Examples of variable costs?

  Raw materials/components, wages, packaging.
• What is the equation for variable costs?

  Costs per item x amount sold
• What are total costs?

  Fixed costs + total variable costs
• What is the equation for fixed costs?

  Fixed Costs = Total Costs – (Variable Cost Per Unit × Number of Units Produced)
• What is the equation for revenue?

  selling price X quantity sold
• What is the formula for profit/loss?

  Revenue-total costs = profit/loss
• What is breakeven?

  When the revenue is equal to the total costs - the business makes neither a profit or loss.
• What is breakeven expressed in?

  units
• What is the equation for breakeven?

  fixed costs/(selling price-variable costs)