3.2. Costs and Revenues | Business Made Easy

Types of costs
- (Examples based on a store like Jollibee)
- Fixed – costs that do not increase or decrease based on quantity of goods produced or capacity of production.
  - Rent, electricity, utilities
- Variable – costs that increase as more products are produced or if a service is at a higher capacity of production
  - Food, paper bags, utensils
- Semi-variable – costs that contain both fixed and variable cost elements
  - Salaries (fixed = regular hours, variable = overtime hours)
- Direct – costs that can be directly attributed to the production of a good or service in a specific aspect or department; can be fixed or variable
  - Direct (fixed) – salary of chickenjoy fryer
  - Direct (variable) – cost of raw chicken
- Indirect/Overhead – costs that aren’t directly part of the product or process of the product/service being sold; can also be fixed or direct
  - Advertisements, franchise fee, etc.
Total revenue
- Total amount of sales generated through different product lines/services offered, without subtracting any costs
- e.g. sale of all food, beverages, and toys
Revenue streams
- One source of sales or revenue that a business has
- A business can have several revenue streams
- e.g. payment from franchisees, revenue from company owned stores