Transcript of Work experience presentation. Task 1 L2, Unit 3.
Work experience presentation Start up costs Operational costs Variable costs Fixed costs These are incurred before a business can start to operate, such as the deposit on rented property, and the purchase of equipment and initial stock. Formal term T These are also incurred once a business is operating. This time the amount spent is directly linked to the number of items sold or the amountof services supplied. For example, the number of tyres bought bty a car manufacturer is directly linked to the number of cars made and sold. This is money spent once a business is up and running. It is spent on items that are needed no matter how many items the business sells to its customers. For example, a newsagent has to pay the shop rent and heating bills whether they sell ots of parers and magazines or only a few. fixed costs are called indirect costs since they are not directly linked to the amount of money coming from the customers. Basically.. The term 'start-up costs' refers to all the money that needs to be spent on setting up a business before it can start trading. Basically.. Variable (or direct) costs - money paid out in direct proportion to the number of items produced and sold. In an easier explanation.. Fixed (or indirect) costs - arise no matter how many items are produced. Operating costs, sometimes called expenses, refers to the money spent on a regular basis, once a business is up and running. They are divided into fixed and variable costs. For example, a nail bar has several fixed cists such as property rental, business rates and staff wages. The main variable cost would be a small fraction of the total costs. On the other hand, some businesses have relatively high variable costs, compared with the fixed costs. High-volume producers of consumer goods, such as washing machines, buy in large quantities of steel and other components. In this case, variable costs would account for most of the expenditure. Did you know? Quite often business people underestimate how much they will need to get a business started. The total cost of the wmebley stadium was £798 million but the original estimate was only £326 million. The increase was a massive 244 percent. Fortunately most businesses do not get things so badly wrong. The End.Full transcript