Analysing Operational Performance (AQA A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
Unit cost definition
Unit cost definition
How much it costs to make a single item or provide one service
Unit cost formula
Unit cost formula
Total cost ÷ Units of output
Alternative name for unit cost
Alternative name for unit cost
Average cost of production
Effect of higher capacity utilisation on unit costs
Effect of higher capacity utilisation on unit costs
Unit costs fall
Why unit costs fall when capacity utilisation rises
Why unit costs fall when capacity utilisation rises
Fixed costs spread across more units of production
Effect of lower capacity utilisation on unit costs
Effect of lower capacity utilisation on unit costs
Unit costs increase
Reducing workforce but keeping same output affects productivity
Reducing workforce but keeping same output affects productivity
Productivity of remaining workers increases
Increasing workforce without raising output affects productivity
Increasing workforce without raising output affects productivity
Productivity falls
Relationship between capacity utilisation & labour productivity
Relationship between capacity utilisation & labour productivity
They move together (assuming constant workforce)
Why unit cost info is crucial
Why unit cost info is crucial
For pricing decisions and assessing profitability