TENTH POST

In the last class we did exercises of topic three and four. We did in group, so we can improve our English.

Later, Keith explained the topic “Finance and Accounts”, although he didn’t finish it.

This topic was about:

• COST: Cost can be:
• Fixed Cost (FC): are not influenced by the amount produced but can change in the long run. e.g., equipment
• Variable Cost (VC): vary directly with the amount produced. e.g., raw material costs

After, he commented the formula of cost, like:

• Total Costs (TC) = Fixed Costs (FC) + Variable Costs (VC)

• REVENUE:
• Total Revenue (TR): also known as turnover, sales revenue or ‘sales’
• TR = P x Q, where: P: Price and Q: Quantity Sold.
• PROFIT:
• Profit = TR – TC
• Profit can be:
• Normal Profit: the minimum amount required to keep a business in a particular line of production.
• Abnormal/Supernormal Profit: the amount over and above the amount needed to keep a business in its current line of production.