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Finance Vocabulary
for Business English

Describing Costs

Fill in the blanks in the sentences below with the words on this chart:
return on investment break even indirect costs fixed costs
overhead costs gross margin cost structure unit cost
economies of scale profit margin variable costs costs
  mark-up direct costs  
1. The money that a company spends in order to produce its products or services are its .
2. do not vary in relation to the output level of good or services - they remain the same.
3. Costs that vary according to the amount of good and services produced are called .
4. are directly related to the products or services produced.  These costs can include raw materials and wages.
5. are not directly related to the production of products or services. They might included charges to pension funds or social security taxes.
6. are used to measure the regular non-production related costs of running a business.  These costs might include marketing and and R & D expenses - or even rents and/or property taxes.
7. The cost of producing one product (one car, one computer, one air conditioner) is know as the for that product.
8. The theory that the larger the size of a production unit, the lower the unit cost - is called .  For example, in producing one million cars, the unit cost would be much lower than if only one car was produced.
9. When sales reach a level where revenues match costs, a company or product can be said to .
10. is the amount of money earned (profit) in direct proportion to the amount of capital invested.
11. The difference between the selling price of goods and their production costs, without taking into account other costs such as marketing and general overhead is called the .
12. The or "net margin" is the difference between the products total costs and its sales revenues.
13. Margin is expressed as a percentage of the selling price.  It can also be expressed as a percentage of the total cost of a good, in which case it is referred to as the .
14. All of a company's costs tend to be unique as every business is a bit different, with different products produced differently and varied organizational structures and overheads. All of these costs considered together make up a company's .