Unit 3 P1

In: Business and Management

Submitted By manpz94
Words 991
Pages 4
In this assignment I am required to prepare a carefully structure handout for learners in which I must describe, using examples, the importance of the different types of cost as well as revenue and profit for the Whitehouse crafts store. I will be using the resources available from the case study.

Introduction to costs at Whitehouse Craft
Whitehouse craft is a small business that started off as part of a small farm; it is so small it employs seven part-time staff. At first the business was run on the sideline but now it has become so significant, the main seller is the tinned scented candles, accounting for 80% of the sales.

Material costs
The material costs is the cost of the materials used to make the final sale product, these products include, decorative candles in tins, in this the materials are the tin, fragrance oils, wax, core and wick, and also the label. All these materials are used to achieve the outcome of the final tinned candle and these are included in the materials cost.

Labour cost
50p is charged for the labour of one tinned candle, this is also the cost of the work that went into the final product, and this is normally paid to the workers hard work.

Other costs
The other costs involve the bills of the overall business of Whitehouse Craft, this include the rent, rates, power/ electricity, telephone, marketing, car expenses and travelling. These help keep the business on track and keep it running, so it can benefit in the future.

Variable costs
Variable costs are also know as direct cost, the more the business makes or sell, the higher the costs. The cost will increase because of the demand of the product. For example the business sells more tinned candles, the higher the cost of the tins.

Fixed costs
Also known as indirect cost, it doesn’t matter how much the business makes or sells, it is the cost they still have to pay no…...

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