Flashcards in understanding the nature and purpose of business Deck (12):
define corporate aims
the long term intentions of the business or what it is trying to achieve
a corporate objective is...
the targets which must be achieved if a firm is to meet its stated aims. they must be SMART
what are fixed costs?
the costs that do not change with the amount the firm produces e.g. mortgage payments
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%
what are total costs?
all costs, both fixed and variable costs, of producing a specific number of goods
unit costs are...
the cost of producing 1 unit or 1 item
the amount of income a firm receives from producing and selling a specific number of goods
profit is made when a firms revenue is greater than its total costs
loss is made when a firms revenue is less than its total costs
what's a mission statement?
this attempts to set out the purpose of an organisation or why it exists
what are the 4 factors of production?