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3.2 COSTS AND REVENUES (COSTS (Indirect costs (overhead) (Production,…
3.2 COSTS AND
REVENUES
COSTS
Direct costs
Labour
Material
Cost of the goods being sold
Indirect costs
(overhead)
Production
Selling and distribution
Administration
Finance
Fixed costs
Remain fixed no matter what the level of output
Variable costs
Vary as output changes
Semi-variable costs
REVENUES
The income received from the sale of a product
Quantity x price
Benefits having more than one source of income
Higher total revenue
Diversification
Drawbacks of developing a range of income-generating activities
losing focus
Separate account is needed