SALES AND COSTS BUSINESS VOCABULARY IN USE

 

BUSINESS VOCABULARY IN USE 27. SALES AND COSTS

 

A Sales 1 Sales describes what a business sells and the money it receives for it. Denise Van Beek of Nordsee Marine is having a sales meeting with her sales team: ‘Our sales figures and turnover (money received from sales) in the last year are good, with revenue (money from sales) of 14.5 million euros, on volume of 49 boats. This is above our target of 13 million euros. We estimate our sales growth next year at ten per cent, as the world economy looks good and there is demand for our products, so my sales forecast is nearly 16 million euros for next year. I’m relying on you!’ B Sales 2 Here are some more uses of the world ‘sale’: a. make a sale: sell something b. be on sale: be available to buy c. unit sales: the number of things sold C Costs The money that a business spends are its costs: • direct costs are directly related to providing the product (e.g. salaries) • fixed costs do not change when production goes up or down (e.g. rent, heating, etc.). • variable costs change when production goes up or down (e.g. materials). D Margins and mark-ups Here are the calculations for one of Nordsee’s boats: • selling price = 50,000 euros • direct production costs = 35,000 euros • selling price minus direct production cost = gross margin = 15,000 euros The net margin of profit margin is usually given as a percentage of the selling price, in this case 20 per cent. The mark-up is usually given as a percentage of the total costs, in this case 25 per cent. EXERCISES 27.1 Match the word combinations (1-7) to their definitions (a-f). 27.2 Match each use of the word ‘sale’ with the correct meaning (a-f) from B opposite. 1 I didn’t pay the full price for these shoes. I bought them in a sale. 4 People queued all night for the beginning of the January sales. 27.3 Choose the correct expression from C opposite to describe Nordsee Marine’s costs. 1. the salary of an office receptionist (direct/ indirect cost) 2. heating and lighting of the building where the boats are made (fixed/ variable cost) 3. the materials used in the boats, and the boatbuilders’ salaries (overhead cost/ COGS) 27.4 Look at D opposite. Read what this company owner says and answer the questions. ‘I’m Vaclav and I own a small furniture company in Slovakia. We make a very popular line of wooden chairs. Each costs 360 korunas to make, including materials and production. We estimate overheads, including administration and marketing costs, at 40 korunas for each chair, and we sell them to furniture stores at 500 korunas each.’

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