Key term
Eduqas A-Level Business A510QS
Enterprise, Business Plans and Location
Topic overviewEnterprise, entrepreneurs and SMEsNeeds, wants and spotting a business opportunityThe role of the entrepreneur in setting up and running a businessFinancial and non-financial motives of entrepreneursCharacteristics and skills of entrepreneursEntrepreneurs, SMEs and the sectors of the UK economyStakeholders and their interestsBusiness plans and sources of adviceChoosing a business location
Markets, Demand and Market Research
Topic overviewMarkets and competitionTypes of marketMarket size, market share and market trendsMarket segmentationMarket structures and degrees of competitionConsumer protectionDemand and the factors that shift itSupply and the factors that shift itEquilibrium price and shifts in the marketPrice and income elasticity of demandPrimary and secondary market researchQualitative and quantitative dataSampling and bias in market research
Business Structure and Sources of Finance
Topic overviewThe private sector and the public sectorAims of private sector businessesSole traders and partnershipsPrivate and public limited companiesUnlimited and limited liabilityChoosing a legal structureNot-for-profit organisationsInternal and personal sources of start-up financeBorrowing, equity and grants for a small business
Revenue, Costs and Break-Even
Topic overviewRevenue, costs and profitFixed, variable and semi-variable costsDirect costs, indirect costs and overheadsCalculating revenue, costs and profitContribution and its usesCalculating the break-even pointBreak-even charts and the margin of safetyWhat-if analysis of changes in costs and revenueThe usefulness and limits of break-even
Marketing and the Marketing Mix
Topic overviewThe purpose of marketing and market orientationThe marketing mix and the four PsProduct, brand, USP and differentiationThe product life cycleExtension strategiesThe product life cycle and cash flowThe Boston matrixPricing strategiesChoosing the right pricing strategyPromotion above the line and below the linePlace and distribution channelsThe marketing mix in different contextsNew technology in marketing
Financial Planning and Accounts
Topic overviewThe role of the finance departmentBudgets and the purpose of budgetingThe benefits and drawbacks of budgetsInternal sources of financeExternal sources of financeChoosing the right source of financeCash flow and cash flow forecastsConstructing and interpreting a cash flow forecastCash flow problems and how to improve cash flowThe income statement, gross profit and net profitGross and net profit margins
People in Organisations
Topic overviewThe role of the human resource departmentThe flexible workforceNew technology and changing working patternsWorkforce planningThe recruitment process, job analysis and job descriptionsInternal and external recruitmentMethods of selecting employeesMethods of trainingThe value of training to a businessAppraisal and its methodsMeasuring workforce performanceOrganisational structures and the chain of commandDelegation, empowerment and delayering
Motivation, Management and Employee Relations
Topic overviewMotivation and the benefits of a motivated workforceTaylor and scientific managementMayo and the Hawthorne studiesMaslow's hierarchy of needsHerzberg's two factor theoryExpectancy theories of Vroom, Porter and LawlerFinancial methods of motivationNon-financial methods of motivationManagement, management by objectives and Theory X and YLeadership and leadership stylesLeadership theories and choosing a styleEmployment rights, contracts and equal opportunitiesTrade unions, industrial conflict and dispute resolution
Operations Management
Topic overviewOperations management and added valueJob, batch and flow productionProductivity and how to raise itCapacity utilisationTechnology in operations: IT, CAD, CAM and roboticsLean production, kaizen and just-in-timeQuality control and quality assuranceTotal quality managementPurchasing, suppliers and methods of stock controlStock control diagrams and stock levelsInnovation, research and developmentInternal and external economies of scaleDiseconomies of scale and the survival of small firms
Data and Market Analysis
Topic overviewPresenting and interpreting business dataIndex numbers and comparing figures over timeCalculating price elasticity of demandInterpreting price elasticity and its effect on revenueIncome elasticity of demandSales forecasting and the reliability of a forecastMoving averages and time-series analysisCorrelation, scatter graphs and extrapolationQualitative forecasting techniques
Analysing Business Performance
Topic overviewBudget variances and how to calculate themAnalysing and evaluating budget variancesThe balance sheet and how it is constructedWorking capital, capital employed and depreciationLiquidity ratios: the current ratio and the acid testReturn on capital employed and gearingComparing accounts over time and between businessesEvaluating the financial position of a businessNon-financial measures of performance and vision statements
Aims, Objectives and Strategy
Topic overviewAims, objectives and SMART targetsMission and vision statementsStrategy, tactics and corporate plansSWOT analysisPorter's Five ForcesThe Ansoff matrixOrganic growthExternal growth: mergers and takeoversHorizontal and vertical integrationFranchising as a method of growthRationalisation and relocationOutsourcing production
Decision-Making and Investment Appraisal
Topic overviewTypes of business decisionScientific and intuitive decision-makingDecision trees: constructing and calculatingEvaluating decision tree analysisCritical path analysis: building the networkInterpreting and evaluating critical path analysisCost benefit analysisPayback and the average rate of returnDiscounted cash flow and net present valueChoosing between investmentsSpecial orders
Change and Risk Management
Topic overviewCauses of change in a businessInternal and external causes of changePlanned and unplanned changeEffects of change on a businessManaging change and Storey's four approachesResistance to change and how it is overcomeEvaluating change and its impact on stakeholdersTypes of risk a business facesRisk assessment, prevention and insuranceContingency planning and crisis management
PEST Factors and the External Environment
Topic overviewPolitical factors and the role of governmentTaxation and subsidiesFiscal and monetary policyEconomic growth, GDP and the business cycleInflation and how it is measuredInterest rates and exchange ratesUnemploymentDemographic changeSocial and cultural changeTechnological factors and automation
Ethical, Legal and Environmental Factors
Topic overviewBusiness ethics and ethical objectivesEthical issues facing a businessCorporate social responsibilityEthics, profitability and stakeholder viewsCompany law, intellectual property and pay lawEmployment, discrimination and health and safety lawConsumer, competition and data protection lawEnvironmental costs of business activityControlling environmental costs and business responses
International Trade, Globalisation and the European Union
Topic overviewInternational trade and why it happensFree trade and protectionismTrading blocs and the single marketEntering new international marketsGlobalisation and its causesThe effects of globalisation on businessStrategies for global growthGlocalisation and adapting to local marketsMultinational companiesThe European Union and the single European marketThe euro, the Eurozone and membership
Revenue, Costs and Break-Even
- 9 subtopics
- 27 things to know
- Component 1
What Revenue, Costs and Break-Even covers
Revenue, Costs and Break-Even is examined in Component 1, Business Opportunities and Functions, and can be drawn on in the synoptic Component 3. It covers revenue, costs and profit, fixed, variable and semi-variable costs, direct costs, indirect costs and overheads, calculating revenue, costs and profit, contribution and its uses, calculating the break-even point, break-even charts and the margin of safety, what-if analysis of changes in costs and revenue and the usefulness and limits of break-even.
Where it is assessed
Component 1
Business Opportunities and Functions.
Check the Eduqas specification ↗The 9 subtopics
Each one has its own page.
- Revenue, costs and profitRevenue in a business context, costs to a business and formula linking revenue, costs and profit.Open →
- Fixed, variable and semi-variable costsFixed costs, variable costs and semi-variable cost.Open →
- Direct costs, indirect costs and overheadsDirect costs, difference between a direct cost and a variable cost and cost that is direct but not variable.Open →
- Calculating revenue, costs and profitTotal revenue as price times quantity, fixed and variable costs added to total cost, and profit as what is left — worked through with figures each question supplies for itself.Open →
- Contribution and its usesFormula for contribution per unit, two ways of calculating total contribution and relationship between total contribution, fixed costs and profit.Open →
- Calculating the break-even pointWhat is meant by break-even and formula for the break-even level of output.Open →
- Break-even charts and the margin of safetyWhat each axis of a break-even chart shows, three lines normally shown on a break-even chart and margin of safety.Open →
- What-if analysis of changes in costs and revenueWhat is meant by what-if analysis in break-even and how a price increase changes a break-even chart.Open →
- The usefulness and limits of break-evenTwo benefits of break-even analysis to a small business, how break-even helps a business obtain finance and how break-even supports a pricing decision.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Key term
When does an extra order still raise profit, and when does a loss arise?
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What is meant by revenue in a business context?
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Define direct costs.
Numbers
State the formula for total revenue.
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Explain what is meant by break-even.
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State what each axis of a break-even chart shows.
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Explain what is meant by what-if analysis in break-even.
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State two benefits of break-even analysis to a small business.
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Give two other names commonly used for revenue.
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Define fixed costs.
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Define indirect costs.
Numbers
A firm sells 4,500 units at £12 each. Calculate its total revenue.
Key term
Define contribution.
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State the formula for the break-even level of output.
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Name the three lines normally shown on a break-even chart.
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Describe how a rise in fixed costs appears on a break-even chart.
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Explain how break-even helps a business obtain finance.
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What are costs to a business?
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Define variable costs.
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What is an overhead?
Numbers
A business has fixed costs of £25,000 and variable costs of £8 per unit. Calculate total costs at an output of 5,000 units.
Numbers
State the formula for contribution per unit.
Numbers
A business has fixed costs of £40,000, a selling price of £25 and variable costs of £15. Calculate the break-even output.
Key term
Describe the shape and position of the fixed cost line on a break-even chart.
Numbers
A firm with fixed costs of £60,000 raises its price from £25 to £30 while variable costs stay at £15. Calculate the new break-even output.
Key term
Explain how break-even supports a pricing decision.
Take Revenue, Costs and Break-Even further
The same content, four other ways.
Questions from this topic
Each one with the model answer underneath.
- 1
What is meant by revenue in a business context?
Model answer
Revenue is the money a business earns from selling its goods and services over a period of time. Revenue is calculated by multiplying selling price by quantity sold.
- 2
Give two other names commonly used for revenue.
Model answer
Revenue is also called sales revenue or turnover. Some businesses record the same figure as total sales income.
- 3
What are costs to a business?
Model answer
Costs are the payments a business makes for the resources it uses in production. Wages, raw materials, rent and energy are all business costs.
- 4
Define profit.
Model answer
Profit is the surplus left when total costs are subtracted from total revenue. A business makes a loss when total costs exceed total revenue.
- 5
State the formula linking revenue, costs and profit.
Model answer
Profit equals total revenue minus total costs. A business earning £90,000 of revenue with £70,000 of costs makes £20,000 profit.
- 6
Why is revenue not the same as profit?
Model answer
Revenue measures only the money coming in from sales and takes no account of what production costs. Profit is what remains after every cost has been paid.
What is inside Levo
Six ways to work the same material.
Revenue, Costs and Break-Even revision questions
- What does Revenue, Costs and Break-Even cover in Eduqas A-Level Business?
- 9 subtopics: revenue, costs and profit, fixed, variable and semi-variable costs, direct costs, indirect costs and overheads, calculating revenue, costs and profit, contribution and its uses, calculating the break-even point, break-even charts and the margin of safety, what-if analysis of changes in costs and revenue and the usefulness and limits of break-even. Each one has its own page with questions and model answers.
- How is Revenue, Costs and Break-Even organised?
- By the Eduqas A510QS specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Revenue, Costs and Break-Even, on a schedule.
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