1. Variable Costs – Gross / Net costs and Gross profits
The gross cost is what the cost would be the price of something before deductions and the
nest price would be the price after deduction costs VAT etc.The gross profit is calculated as
sales and all costs related to the sales and all the things used to sell something, materials,
labour, marketing etc. Working out all the costs of what has been used to create the
product and how much the product is worth will help you understand how much profit is
being made by understanding how much money you are getting back and how much was
spent in the first place, the best way to keep one thing tracked to show how much profit
exactly you are getting back from the product is using percentages.
Fixed Costs
A periodic cost that remains more or less unchanged irrespective of the output level or sales
revenue, such as depreciation, insurance, interest, rent, salaries, and wages.
While in practice, all costs vary over time and no cost is a purely fixed cost, the concept of
fixed costs is necessary in short term cost accounting. Organizations with high fixed costs
are significantly different from those with high variable costs. This difference affects the
financial structure of the organization as well as its pricing and profits. The breakeven point
in such organizations (in comparison with high variable cost organizations) is typically at a
much higher level of output, and their marginal profit (rate of contribution) is also much
higher.
Net Profit
Net profit is calculated by subtracting a company's total expenses from total revenue, thus
showing what the company has earned (or lost) in a given period of time (usually one year).
Also called net income or net earnings.
Monitoring
Supervising activities in progress to ensure they are on-course and on-schedule in meeting
the objectives and performance targets.