max’s cartoon cakes
DESCRIPTION
Max’s Cartoon Cakes. Objectives. To understand the different types of costs that a business might have To understand how a firm calculates its sales revenue To understand how profit is calculated To understand the link between supply and demand in the cake market. The aim of the game is …. - PowerPoint PPT PresentationTRANSCRIPT
ObjectivesObjectives• To understand the different types of
costs that a business might have• To understand how a firm calculates its
sales revenue• To understand how profit is calculated• To understand the link between supply
and demand in the cake market
Fixed CostsFixed CostsCosts that do not vary with
output eg rent, insurance
Fixed costs per month for Max:
£4,000
Variable CostsVariable Costs
Costs that do vary with output eg flour, eggs, sugar (raw materials)
Variable costs for one crate of cakes produced:
£1,000
Sales RevenueSales RevenueThe money received from
customers when they pay for goods.
Price x Number of goods sold:
£3 x 10 = £30
Decisions each Decisions each monthmonth::
• How many crates of cakes shall we produce? (Output)
• How much shall we charge for each crate? (Price)
Price you should charge:Between £2,000 and £10,000 per
crate of modelsNumber of crates you should make:Between 2 and 10 crates
What I will buy:Cheapest price 8 cratesNext cheapest 6 cratesNext cheapest 4 cratesMost expensive 2 crates
True or False?The money received from customers when they pay for goods is called sales revenue.
TrueTrue