Btec Business lvl 3
Unit 2 Distinction
exemplar 2022 paper -
Making a marketing
campaign
Start Up Costs - ANS-the expenses a new business must pay
... [Show More] before it can begin to
trade. e.g, till, safe (depends on the business.
Operating Costs (running costs) - ANS-expenses a business has in it's day to day
operations. e.g electricity, gas, water bills.
Fixed Costs - ANS-Costs that stay the same no matter how much or how little you
produce or sell.
Variable Costs - ANS-Costs that vary depending on the level of output. e.g light,
heating, bills etc
Direct Costs - ANS-A cost which is directly related to output, e.g the cost of wood in a
furniture factory.
Indirect Costs - ANS-A cost which is not determined by the level of output. e.g staff
uniforms
Total Costs - ANS-Fixed Costs + Variable Costs
Variable costs? - ANS-Cost of One Unit x Number of Units
Sources of Revenue - ANS-How businesses get money, e.g Selling Products and/or
services, Rent, Interest, Loans etc
Revenue (sales) - ANS-Number of Sales x Price Per Unit
Expenditure - ANS-The money a business pays out.
Overheads - ANS-A word used to describe costs such as wages, rent, business rates,
utility bills etc.
Raw Materials - ANS-used by a business to make a product, e.g wood for a furniture
manufacturer.
Profit - ANS-When revenue (sales) is higher than expenditure (costs).
Loss - ANS-When expenditure is higher than revenue (sales).
Sell More, Increase your prices, reduce your prices, reduce your costs. - ANS-How
could you increase your profits?
Break Even - ANS-A point at which revenue equals expenses, there for you make
neither a profit or a loss.
Fixed Costs, Sales Revenue, Variable Costs - ANS-What lines need to be plotted on a
Break Even Chart?
Margin of Safety - ANS-The amount by which sales would have to fall before the break
even point is reached.
Break Even = Fixed Costs divided by Selling Price per unit - Variable costs - ANS-What
is the break even formula?
When looking to set up a new business to see how many you would need items you
would need to sell to make a profit . - ANS-When would you use break even analysis?
Break even point will go up. As you have got to sell more to cover the higher costs. -
ANS-What happens to the break even point if costs go up?
Break even point will go down , as you will need to sell fewer to make a profit as the
costs you need to cover are lower. - ANS-What happens to the break even point if costs
fall?
It would fall because you will need to sell fewer to break even. - ANS-What happens to
the break even point if you increase your selling price?
It would go up because you will need to sell more to break even. - ANS-What happens
to the break even point if you reduce your selling price?
The money coming into and out of a business? - ANS-What is Cash Flow?
An estimate (educated guess) at what money will be coming into a business
(sales/revenue) and going out of a business. expenditure/costs). It allows the owner to
spot any issues in advance and take action. - ANS-What is Cash Flow Forecasting?
Sales, Bank Loans, Rents from Property the business owns, Interest received on
savings. - ANS-Give two examples of inflows (money coming into the business)
Wages, Stock, Advertising, Rent, Utility Bills, Insurance etc - ANS-Give three examples
of outflows (money going out of the business)
The direct costs associated with making or selling a product or service. - ANS-What are
Cost of Sales [Show Less]