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3.2 Costs and Revenues - Coggle Diagram
3.2 Costs and Revenues
Definition : Management decisions can cover a wide range of issues and they require much information before effective strategies can be adopted.
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Types of Cost
Direct Cost
Costs that can be identified with or clearly attributed to the production of
specific goods or services.
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Profit
The difference between revenues and costs . ahigh positve difference is a good inidcator of business sucess
Fixed Costs
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Examples include rent, insurance, salaries, and interest payments.
Variable Cost
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Examples include wages, raw material costs, sales commissions, and packaging.
Semi variable
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Remain fixed for a given level of production or consumption, after which they become variable when the set level is exceeded.
Total Revenue
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Total revenue includes all income received, whether the goods or services were sold
on credit or cash.
Revenues streams
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A firm’s revenue is obtained not only from its trading activities. It may develop a range of other trading activities.
Revenue streams : Rental Income, Interest on deposits , dividends , Donations