Unit 3 Task P1
Identify the differences between start up and operating costs, Variable and fixed costs
A start is what occurs when someone starts up a business and it is what the person has to pay before they start their business for example the building for the shop, a delivery van for the business and machinery to make the products.
Operating costs are the costs that occur while a business is selling products and using the store for example the costs are gas and electric bills, rent and advertisements.
The difference between fixed costs and variable costs are that fixed costs are the costs that occur but will not change at all but variable costs are the costs that occur and will change with the amount of the product sold. Examples of fixed costs are electricity bills, advertisement bills and rent but variable costs are the cost of raw materials, insurance and the business rates.
Unit 3 task P2
Revenue is all the income brought in by a business
All of Hannah’s possible sources of revenue are the sandwiches she sells and renting out her delivery van
The three main sources of revenue are the sales:
Sales- they sell products or services for example Tesco products they sell food and for services they sell car washes
Interest- charged on borrowing money or saving money in a bank. For example a bank loan, the bank will charge interest on any money it loans to a customer the interest is the banks reward for loaning the money.
Renting/leasing- on a temporary basis or long term contract, owners can receive money from allowing one to use the property or asset of another, for example renting a home or leasing a car.
Hannah’s revenue
Revenue = Selling price x quantity sold
600 sandwiches x £3.00 each = £1800
Renting van for 12