Costs, revenues, final accounts and (HL) depreciation

Learning objectives

Classify costs as fixed, variable, semi-variable, direct and indirect, and calculate total cost, total revenue and profit at a given level of output

Construct a profit and loss account from given data, calculating gross profit, profit before interest and tax, and profit for the period

Construct a balance sheet and explain the relationship between non-current assets, current assets, liabilities and equity

(HL) Explain the purpose of depreciation, calculate it by the straight-line and the units-of-production methods, and comment on the appropriateness of each method and its effect on reported profit

Distinguish tangible from intangible assets such as brands, patents, copyrights and goodwill, and discuss the difficulty of placing a reliable value on them

Explain how shareholders, employees, lenders, suppliers, government and competitors read the same set of final accounts for different purposes