Chapter 15: Costs and revenues

revenue stream

a source of income received over time from the sale of a product

fixed costs

costs that do not vary with output or sales in the short term

variable costs

costs which vary with output

direct costs

costs that can be clearly identified with each unit of production and can be traced back or 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

revenue (or sales turnover)

the value of sales made during the trading period = selling price * quantity sold

total revenue

total income from the sale of all units of a product during a given time period