3.2 Costs & revenues

Revenue stream

________: income that an organization gets from a particular activity.

Revenue

________: income received from the sale of a product.

Direct costs

costs which can be clearly identified with each unit of production and can be allocated to a cost centre

Indirect costs

costs which cannot be identified with a unit of production or allocated accurately to a cost centre also known as overhead costs

Fixed costs

costs that do not vary with output in the short run

Variable costs

costs that vary with output

Semi-variable costs

costs that have both a fixed and variable cost element

Revenue

income received from the sale of a product

Total revenue

total income from the sale of all units of the product = quantity x price

Revenue stream

income that an organization gets from a particular activity

Direct costs

Costs which can be clearly identified with each unit of production and can be allocated to a cost centre

Indirect costs

Costs which cannot be identified with a unit of production or allocated accurately to a cost centre also known as overhead costs

Fixed costs

Costs that do not vary with output in the short run

Variable costs

Costs that vary with output

Semi-variable costs

Costs that have both a fixed and variable cost element

Revenue

Income received from the sale of a product

Total revenue

Total income from the sale of all units of the product = quantity x price

Revenue stream

Income that an organization gets from a particular activity