BTEC Business Studies Formulas and Keywords Unit 2 Exam Questions Solved 100%
Revenue - Answers The money coming into the business
Fixed Costs - Answers Costs that stay the same
Variable Costs - Answers Costs that change with output
Total Costs - Answers = Fixed Costs + Variable Costs
Total Variable Costs - Answers = Variable Cost * Quantity
Profit formula - Answers =Revenue - Total Costs
Profit - Answers Money made by the business
Budget - Answers A financial plan for the future
Revenue formula - Answers = Selling price * quantity sold
Break-even Output (formula) - Answers =Fixed costs / Contribution per unit (selling price per unit -
variable cost per unit)
Contribution per unit formula - Answers Selling price - variable cost per unit
variable cost per unit formula - Answers total variable cost/ number of units
selling price per unit - Answers Sales / Quantity Sold
Break Even - Answers When a business makes neither a loss nor a profit
Total contribution - Answers Total revenue - total variable costs
Contribution - Answers Selling Price - Variable Costs
Margin of Safety - Answers Amount a business sells over its break even point
Margin of Safety Formula - Answers = Quantity Sold - Break Even
Income Budget - Answers Plan the money from sales
Expenditure budget - Answers How much you are spending
Profit budget - Answers How much you expect to make
Net Cash Flow - Answers Total inflows- total outflows
Opening Balance - Answers The closing balance of the previous month
, Closing Balance - Answers Opening balance + Net Cash Flow
Cash Flow Forecast - Answers A prediction of cash coming into and out of a business over a period of
time
Income statement - Answers a statement for a period of time, usually a year, showing how much profit
or loss a business has made
Cost of Goods Sold - Answers Opening inventory + purchases - closing inventory
operating profit - Answers Gross Profit - Expenses
Gross Profit - Answers = Revenue - Costs of Sales
Net Profit - Answers = Gross Profit - Expenses
Total revenue - Answers selling price x quantity sold
straight-line method - Answers historic value(original costs) - residue value (resale value)* expected life
Reducing balance method - Answers Calculates depreciation by subtracting a fixed percentage from the
previous year's net book value
NBV - Answers new value of assets
Net current assets - Answers current assets - current liabilities
Net assets - Answers total assets - total liabilities
Total Equity - Answers owners/ shareholders + retain profit- Drawing
Gross Profit Margin - Answers Gross profit/sales revenue x 100
Operating Profit Margin - Answers Operating profit / sales revenue x 100
Mark-up - Answers Gross profit / cost of sales x 100
Return on capital employed - Answers Operating profit / capital employed x 100
trade receivables days - Answers Trade receivables / credit sales x 365
Trade payable days - Answers Trade payables / credit purchases x 365
Inventory Turnover - Answers Average inventory / cost of sales x 365
factors that influence your view on money - Answers culture
life events
external influences
Revenue - Answers The money coming into the business
Fixed Costs - Answers Costs that stay the same
Variable Costs - Answers Costs that change with output
Total Costs - Answers = Fixed Costs + Variable Costs
Total Variable Costs - Answers = Variable Cost * Quantity
Profit formula - Answers =Revenue - Total Costs
Profit - Answers Money made by the business
Budget - Answers A financial plan for the future
Revenue formula - Answers = Selling price * quantity sold
Break-even Output (formula) - Answers =Fixed costs / Contribution per unit (selling price per unit -
variable cost per unit)
Contribution per unit formula - Answers Selling price - variable cost per unit
variable cost per unit formula - Answers total variable cost/ number of units
selling price per unit - Answers Sales / Quantity Sold
Break Even - Answers When a business makes neither a loss nor a profit
Total contribution - Answers Total revenue - total variable costs
Contribution - Answers Selling Price - Variable Costs
Margin of Safety - Answers Amount a business sells over its break even point
Margin of Safety Formula - Answers = Quantity Sold - Break Even
Income Budget - Answers Plan the money from sales
Expenditure budget - Answers How much you are spending
Profit budget - Answers How much you expect to make
Net Cash Flow - Answers Total inflows- total outflows
Opening Balance - Answers The closing balance of the previous month
, Closing Balance - Answers Opening balance + Net Cash Flow
Cash Flow Forecast - Answers A prediction of cash coming into and out of a business over a period of
time
Income statement - Answers a statement for a period of time, usually a year, showing how much profit
or loss a business has made
Cost of Goods Sold - Answers Opening inventory + purchases - closing inventory
operating profit - Answers Gross Profit - Expenses
Gross Profit - Answers = Revenue - Costs of Sales
Net Profit - Answers = Gross Profit - Expenses
Total revenue - Answers selling price x quantity sold
straight-line method - Answers historic value(original costs) - residue value (resale value)* expected life
Reducing balance method - Answers Calculates depreciation by subtracting a fixed percentage from the
previous year's net book value
NBV - Answers new value of assets
Net current assets - Answers current assets - current liabilities
Net assets - Answers total assets - total liabilities
Total Equity - Answers owners/ shareholders + retain profit- Drawing
Gross Profit Margin - Answers Gross profit/sales revenue x 100
Operating Profit Margin - Answers Operating profit / sales revenue x 100
Mark-up - Answers Gross profit / cost of sales x 100
Return on capital employed - Answers Operating profit / capital employed x 100
trade receivables days - Answers Trade receivables / credit sales x 365
Trade payable days - Answers Trade payables / credit purchases x 365
Inventory Turnover - Answers Average inventory / cost of sales x 365
factors that influence your view on money - Answers culture
life events
external influences
