3.3 - Costs and Revenues

Fixed Costs

costs that do not vary with the level of output or sales

Variable Costs

costs that vary with the level of output or sales

Direct Costs

costs that can be traced back to the output of a product

Indirect Costs

costs that cannot be clearly traced to the production/sale of a single product (overheads)

Dividends

a portion of a company's profits that is paid to its shareholders

Sponsorship Revenue

the income generated from organizations that financially support an individual or event in exchange for promotional opportunities

Donations

money or goods that are given to help a person or organization

Interest Earning

money earned by an individual or company for lending their funds by putting them into a deposit account

Advertising Revenue

the income earned from displaying paid ads on websites, social media etc.

Subscription

a customer pay a recurring price at regular intervals (monthly/yearly) for access to a product or service

Merchandise

goods that are created and sold for profit (e.g. apparel, accessories)

Franchise Costs/Royalties

the fee franchisees pay to the franchisor to purchase the rights to use its brand name, logos, and trademark

Transaction Fees

the fee that businesses need to pay to their payment service provider every time the provider processes an electronic payment

Subvention

subsidies offered from the government to certain businesses to help reduce their costs of production and are usually given to organizations that benefits to society, such as private schools and hospitals