BTEC business Finance
questions and answers
Sales Revenue - answer All the money that a business receives (number of
sales x price per unit = revenue)
Gross Profit - answer The money left over once cost of sales has been
taken away from revenue (revenue - cost of sales = gross profit)
Net Profit - answer The money left over once expenditure has been taken
away from gross profit (gross profit - expenditure = net profit)
Break even point - answer When a business has made enough revenue to
cover the costs (fixed costs / selling price - variable cost per unit = break-
even)
Margin of safety - answer Is the difference between the target or actual
sales and the break even point (target sales - break-even point = margin
of safety)
Start up cost - answer Costs a business only has to pay for once when the
business is being set up
Running/operating costs - answer Costs paid by a business on a regular
basis
Variable costs - answer A cost that varies with the level of output (variable
cost per unit x number made/sold = variable costs)
Fixed costs - answer Costs a business has to pay even if it produces
nothing
questions and answers
Sales Revenue - answer All the money that a business receives (number of
sales x price per unit = revenue)
Gross Profit - answer The money left over once cost of sales has been
taken away from revenue (revenue - cost of sales = gross profit)
Net Profit - answer The money left over once expenditure has been taken
away from gross profit (gross profit - expenditure = net profit)
Break even point - answer When a business has made enough revenue to
cover the costs (fixed costs / selling price - variable cost per unit = break-
even)
Margin of safety - answer Is the difference between the target or actual
sales and the break even point (target sales - break-even point = margin
of safety)
Start up cost - answer Costs a business only has to pay for once when the
business is being set up
Running/operating costs - answer Costs paid by a business on a regular
basis
Variable costs - answer A cost that varies with the level of output (variable
cost per unit x number made/sold = variable costs)
Fixed costs - answer Costs a business has to pay even if it produces
nothing
