1. Ben Storer
Variable Costs - Variable costs are expenses that change in proportion to the activity of a
business. Variable cost is the sum of marginal costs over all units produced. Gross profit or sales profit
is the difference between revenue and the cost of making a product or providing a service, before
deducting overhead, payroll, taxation, and interest payments. Note that this is different from
operating profit (earnings before interest and taxes).
Fixed Costs - Fixed costs are business expenses that are not dependent on the level of goods or
services produced by the business. They tend to be time-related, such as salaries or rents being paid
per month, and are often referred to as overhead costs. This is in contrast to variable costs, which are
volume-related (and are paid per quantity produced).
Break Even Point – Break even is the point of balance between making either a
profit or a loss. The term originates in finance, but the concept has been applied widely since.
The break even point is an acceptable amount of sales for the developers/publishers to
consider the project a success or a failure, the break even point is usually the amount it takes
to pay for all of the development costs for the project or make a small profit.
Monitoring - Once you have set up the budget, compare it to the actual figures every month, to
look for differences and establish why they are there. Adjust expenditure or sales efforts as you go
along, to bring the next group of numbers in line with the budget.
Monitoring is key to making sure the budget you set is working smoothly, if it isn’t you need to make
changes according to why the current budget isn’t working.