Business Management HL
6
Chapters
223
Notes
Unit 1 - Introduction To Business Management - QB
Unit 2 - Human Resource Management - QB
Unit 3 - Finance & accounts - QB
Unit 4 - Marketing - QB
Unit 5 - Operations management - QB
Unit 6 - Assessment
Business Management HL
Unit 3 - Finance & accounts - QB
Unlock Business Success: Master Fixed, Variable, & Total Costs
688 words
4 mins read
Last edited on 5th Nov 2024
Table of content
Fixed costs 🚀
- Definition: Costs that don't change no matter how many products you make or don’t make. Imagine paying rent for a shop. Even if the shop sells zero products in a month, the rent is still due! That’s a fixed cost.
- Real-world example: Let's say you're a gamer. If you buy a gaming console, that’s a one-time cost you incur regardless of how many games you play. It’s the same with businesses – they have costs like rent and salaries that stay consistent.
Variable costs 🛴
- Definition: Costs that wiggle and jiggle based on how much a business produces. Make more, pay more! Make less, pay less!
- Real-world example: Every time you bake cookies, you buy ingredients. The more cookies you bake, the more chocolate chips you need, right? Variable costs work the same way - like paying for extra ingredients when the business bakes more cookies.
Total cost 🔥
- Definition: This is the mega cost! It's the combination of fixed and variable costs.
- Real-world example: Imagine you throw a party. You have fixed costs (like renting a venue) and variable costs (like pizzas for each friend). Your total cost? Rent + Pizzas (and maybe those unexpected last-minute party hats!).
Direct vs. indirect costs 🎯
- Direct Costs: Expenses that you can point to and say, "Hey! That cost is because of this product!" Like the leather for a specific shoe design.
- Indirect Costs: A bit sneaky, these can't be pinned on a single product. Think of electricity for a factory – it benefits all the products made there!
- Real-world example: Direct Cost = Buying a specific guitar string for a guitar model. Indirect Cost = The electricity used in the music store.
Unlock the Full Content! 
Dive deeper and gain exclusive access to premium files of Business Management HL. Subscribe now and get closer to that 45 🌟
Business Management HL
Unit 3 - Finance & accounts - QB
Unlock Business Success: Master Fixed, Variable, & Total Costs
688 words
4 mins read
Last edited on 5th Nov 2024
Table of content
Fixed costs 🚀
- Definition: Costs that don't change no matter how many products you make or don’t make. Imagine paying rent for a shop. Even if the shop sells zero products in a month, the rent is still due! That’s a fixed cost.
- Real-world example: Let's say you're a gamer. If you buy a gaming console, that’s a one-time cost you incur regardless of how many games you play. It’s the same with businesses – they have costs like rent and salaries that stay consistent.
Variable costs 🛴
- Definition: Costs that wiggle and jiggle based on how much a business produces. Make more, pay more! Make less, pay less!
- Real-world example: Every time you bake cookies, you buy ingredients. The more cookies you bake, the more chocolate chips you need, right? Variable costs work the same way - like paying for extra ingredients when the business bakes more cookies.
Total cost 🔥
- Definition: This is the mega cost! It's the combination of fixed and variable costs.
- Real-world example: Imagine you throw a party. You have fixed costs (like renting a venue) and variable costs (like pizzas for each friend). Your total cost? Rent + Pizzas (and maybe those unexpected last-minute party hats!).
Direct vs. indirect costs 🎯
- Direct Costs: Expenses that you can point to and say, "Hey! That cost is because of this product!" Like the leather for a specific shoe design.
- Indirect Costs: A bit sneaky, these can't be pinned on a single product. Think of electricity for a factory – it benefits all the products made there!
- Real-world example: Direct Cost = Buying a specific guitar string for a guitar model. Indirect Cost = The electricity used in the music store.
Unlock the Full Content!
Dive deeper and gain exclusive access to premium files of Business Management HL. Subscribe now and get closer to that 45 🌟