PPT-5.2.1 COSTS, REVENUE AND PROFIT

IB Business amp Management IB2 Higher Level Objectives By the end of the lesson students should be able to To classify costs as fixed variable semivariable direct indirect To understand the importance of profit quality . Costs and Marginal Analysis (Chapter 9). In this chapter, look for the answers to these questions:. Why are . implicit. as well as . explicit. costs important in decision making?. What is the difference between . Unit 2- Revision . Please watch this video. Write down all the costs you can think of when running a barber shop.. http://barberconnect.co.uk. (video on homepage). What is a cost?. http://. www.salonsdirect.com. Based on the books: . Building Lean Supply Chains with the Theory . of . Constraints . M. anaging . Business Process Flow . Throughput Profit Multiplier (TPM). A large fraction of the operating costs are fixed . Marginals. for linear functions. Break Even points. Supply and Demand Equilibrium. Applications with Linear Functions. Cost, Revenue, Profit, . Marginals. Cost: C(x) = variable costs + fixed costs. Revenue: R(x) = (price)(# sold). maximization. Economic profit = total revenue - all economic costs. Economic costs include accounting cost. (. explicit. . costs. ). and opportunity costs (implicit. . costs. ).. Profit maximization. 1. Revenue recognition. Expense recognition. Revenue recognition by critical event. Revenue recognition by effort expended. The percentage-of-completion method. Long-term contract losses. The instalment method. Marginals. for linear functions. Break Even points. Supply and Demand Equilibrium. Applications with Linear Functions. Cost, Revenue, Profit, . Marginals. Cost: C(x) = variable costs + fixed costs. Revenue: R(x) = (price)(# sold). AP Economics. Mr. Bordelon. Profit. Profit.. . . T. otal revenue minus total cost. π means “profit.”. π = TR – TC. Total revenue.. Price of output times the quantity sold.. TR = PQ. Total cost.. 2. Pragmatic approach to measuring and attacking complexity. Synthesized from years in the field. McGraw-Hill (November 2009). The latest thinking on COMPLEXITY. 3. “We’re surrounded. That simplifies the problem.”. Please watch this video. Write down all the costs you can think of when running a barber shop.. http://barberconnect.co.uk. (video on homepage). What is a cost?. http://. www.salonsdirect.com. What is a cost?. ©2011 John M. Abowd and Jennifer P. Wissink, all rights reserved.. What Is A Firm?. Broadly: A firm is an organization producing goods or services, also called a business.. Examples of common businesses: . . The costs that an organization incurs even when there is little or no activity are . fixed costs. , or . overhead. .. Finding Marginal Cost. . Variable costs . are usually associated with labor and raw materials and change with the business’s rate of operation or output.. Behind the Supply Curve. Profit . Profit = Total Revenue – Total Cost. Primary goal of a firm is to maximize profit. Can be done in two ways. Increase revenue. Reduce costs. What types of costs exist?. Based on the books: . Building Lean Supply Chains with the Theory . of . Constraints . M. anaging . Business Process Flow . Throughput Profit Multiplier (TPM). A large fraction of the operating costs are fixed .