AQA A LEVEL BUSINESS - DEFINITIONS
Adverse varience - ANSWER-When actual costs are higher than budget costs
Autocratic - ANSWER-When the manager makes all the decisions
Bank overdraft - ANSWER-The amount that can be overspent on a bank account (be
overdrawn)
Blake mouton grid - ANSWER-The concern for people and production a manager has
Boston matrix - ANSWER-Product portfolio analysis of a business into 4 categories
Branding - ANSWER-how consumers recognise and identify with a product
Break-Even - ANSWER-The point when total sales is equal to total costs
Budget - ANSWER-Income and costs predicted over a period of time
Buffer inventory - ANSWER-Minimum amount of stock a business requires to operate
Capacity utilisation - ANSWER-The amount of total capacity is being used
Cash flow - ANSWER-Cash moving into and out of a business
Cash flow forecast - ANSWER-The projection of likely cash inflows and outflows
Competition - ANSWER-Other businesses that compete for a share in the same market
Competitiveness - ANSWER-The business' ability to offer a better product than its
competitors (measured in customers)
Correlation - ANSWER-Relationship between two variables
Total Contribution - ANSWER-The difference between the total sales and total variable
costs
Delegation - ANSWER-Where a responsibility or task is passed onto another employee
in the business
Demand - ANSWER-Amount of a good or service that customers desire
Democratic - ANSWER-Leadership management when the manager involves the
employees to make a decision
, Distribution channel - ANSWER-How the business gets its products to the end
consumer
Dividend - ANSWER-x
Elasticity of demand - ANSWER-Responsiveness of demand towards the change of
price
Extrapolation - ANSWER-Using previous data to predict future data
Favourable variance - ANSWER-When the actual is higher than budgeted results
Fixed costs - ANSWER-Costs that do not vary with the level of output
Gross profit - ANSWER-Revenue - cost of sales
Hierarchy - ANSWER-The structures and levels of management and supervision within
a business
Income elasticity of demand - ANSWER-The responsiveness of demand to a change of
income
Inventory control - ANSWER-Process that ensures that the business has sufficient but
not too much stock
Job design - ANSWER-The way which tasks are combined to form a job
Just-in-time - ANSWER-Method when inventory arrives just when it's needed
Labour productivity - ANSWER-Output produced per employee over a given time
Lean production - ANSWER-Methods of production where a business can reduce waste
Limited liability - ANSWER-Owners are only liable for the money they have invested
Margin of safety - ANSWER-Difference between actual level of output and break even
Market capitalisation - ANSWER-Margin of outstanding shares in a plc
Market growth - ANSWER-The percentage growth of a market over a period of time
Market research - ANSWER-planning, collecting and analysing data to make a market
decision
Adverse varience - ANSWER-When actual costs are higher than budget costs
Autocratic - ANSWER-When the manager makes all the decisions
Bank overdraft - ANSWER-The amount that can be overspent on a bank account (be
overdrawn)
Blake mouton grid - ANSWER-The concern for people and production a manager has
Boston matrix - ANSWER-Product portfolio analysis of a business into 4 categories
Branding - ANSWER-how consumers recognise and identify with a product
Break-Even - ANSWER-The point when total sales is equal to total costs
Budget - ANSWER-Income and costs predicted over a period of time
Buffer inventory - ANSWER-Minimum amount of stock a business requires to operate
Capacity utilisation - ANSWER-The amount of total capacity is being used
Cash flow - ANSWER-Cash moving into and out of a business
Cash flow forecast - ANSWER-The projection of likely cash inflows and outflows
Competition - ANSWER-Other businesses that compete for a share in the same market
Competitiveness - ANSWER-The business' ability to offer a better product than its
competitors (measured in customers)
Correlation - ANSWER-Relationship between two variables
Total Contribution - ANSWER-The difference between the total sales and total variable
costs
Delegation - ANSWER-Where a responsibility or task is passed onto another employee
in the business
Demand - ANSWER-Amount of a good or service that customers desire
Democratic - ANSWER-Leadership management when the manager involves the
employees to make a decision
, Distribution channel - ANSWER-How the business gets its products to the end
consumer
Dividend - ANSWER-x
Elasticity of demand - ANSWER-Responsiveness of demand towards the change of
price
Extrapolation - ANSWER-Using previous data to predict future data
Favourable variance - ANSWER-When the actual is higher than budgeted results
Fixed costs - ANSWER-Costs that do not vary with the level of output
Gross profit - ANSWER-Revenue - cost of sales
Hierarchy - ANSWER-The structures and levels of management and supervision within
a business
Income elasticity of demand - ANSWER-The responsiveness of demand to a change of
income
Inventory control - ANSWER-Process that ensures that the business has sufficient but
not too much stock
Job design - ANSWER-The way which tasks are combined to form a job
Just-in-time - ANSWER-Method when inventory arrives just when it's needed
Labour productivity - ANSWER-Output produced per employee over a given time
Lean production - ANSWER-Methods of production where a business can reduce waste
Limited liability - ANSWER-Owners are only liable for the money they have invested
Margin of safety - ANSWER-Difference between actual level of output and break even
Market capitalisation - ANSWER-Margin of outstanding shares in a plc
Market growth - ANSWER-The percentage growth of a market over a period of time
Market research - ANSWER-planning, collecting and analysing data to make a market
decision
