Edexcel A Level Business: Paper 2 (Advanced Information)

Edexcel A Level Business: Paper 2 (Advanced Information) Break Even - ANS When a business generates just enough revenue to cover its total costs Break-Even Point - ANS the point at which the costs of producing a product equal the revenue made from selling the product Contribution - ANS The amount of money left over after variable costs have been subtracted from revenue. The money contributes towards fixed costs and profit. Margin of Safety - ANS the range of output between the break even level and the current level of output, over which profit is made. Contribution per Unit - ANS Selling price - variable cost per unit Break Even Formula - ANS Fixed costs / contribution per unit Total contribution - ANS Contribution per unit x number of units sold Fixed Costs - ANS Costs that do not vary with the quantity of output produced Variable Costs - ANS costs that vary with the quantity of output produced Total Revenue - ANS the total amount of money a firm receives by selling goods or services Total Costs - ANS fixed costs + variable costs Profit - ANS what remains after all business expenses have been deducted from sales revenue Budget - ANS An agreed upon forward financial plan Budgetary Control - ANS A business system that involves making future plans, comparing the actual results with the planned results and then investigating the causes of any differences Historical Figures - ANS Quantitative information based on past trading records Production Cost Budget - ANS A firm's planned production costs for a future period of time Sales Budget - ANS A firm's planned sales for a future period of time - can be measured in terms of volume or revenue Variance - ANS the difference between actual financial outcomes and those budgeted Variance Analysis - ANS T