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Flashcards in understanding the nature and purpose of business Deck (12):
1

define corporate aims

the long term intentions of the business or what it is trying to achieve

2

a corporate objective is...

the targets which must be achieved if a firm is to meet its stated aims. they must be SMART

3

what are fixed costs?

the costs that do not change with the amount the firm produces e.g. mortgage payments

4

define variable costs

the costs that change as output changes. they change in direction to proportion e.g raw materials cost will increase by 10% if output increases by 10%

5

what are total costs?

all costs, both fixed and variable costs, of producing a specific number of goods

6

unit costs are...

the cost of producing 1 unit or 1 item

7

what's revenue?

the amount of income a firm receives from producing and selling a specific number of goods

8

what's profit?

profit is made when a firms revenue is greater than its total costs

9

define loss

loss is made when a firms revenue is less than its total costs

10

what's a mission statement?

this attempts to set out the purpose of an organisation or why it exists

11

what are the 4 factors of production?

land
labour
capital
enterprise

12

define enterprise

the bringing together of the other factors of production to produce the goods and services