1. Miss Jones’ Expectations 1.Arrive on time for every lesson with the relevant equipment. 2.When the teacher is speaking the class should be quiet. 3.Follow all instructions during lesson. 4.Be prepared to participate in every lesson.

3. Lesson Objective: Understand the different types of business costs and be able to give an example of each type of cost

4. Hannah has worked for a florist in Harrogate for the past three years. She has decided that she would like to be her own boss and run her own florist business. She realises that, whilst she may have a lot of experience in running a florist shop, she will have to learn a lot more about the financial aspects of the business if she is to succeed. Hannah has found a retail unit she likes in the suburbs of Harrogate. The unit has electricity, water and telephone and these are paid for according to the amount used. The rent will be £750 per month and Business rates will be £150 per month. In addition she will have insurance to pay of £100 per month. The shop will need some alterations and decoration work to be done before it can be used as a florist and the cost of this work is estimated at £5000. In addition to this she will need to purchase a second hand van in order to do her deliveries. This will cost her £2500. Hannah has a friend who makes pottery and he has asked if he can use the van when she is not busy. He has agreed to pay her £50 whenever he uses the van. He has also asked if he can display some of his pottery in the shop and Hannah has agreed to do this in return for a commission of 20% of the price of any pottery sold in the shop. Hannah has savings of £5000 and her father has agreed to lend her a further £7500, which she has agreed to repay at the rate of £100 per month.

5. Costs that have to be paid before the business begins trading. Ongoing costs that the business has to pay whilst running the business. - Machinery - Decorating - Van Rent - Insurance - Bills - Your Task: Explain what start-up costs and operating costs are, giving three examples for each that applied to Hannahs business.

6. Variable costs –Costs which change as output varies Fixed costs –Costs which do not change when output varies

7. Raw materials Bought-in stocks Wages based on hours worked or amount produced Marketing costs based on sales Rent & rates Salaries Advertising Insurance Adviser costs Design and development

8. Your Task: Explain what fixed costs and variable costs are, giving three examples for each that applied to Hannah’s business. Are the effected by output or not? The total costs of a business can be calculated by: Total costs (TC) = Fixed costs (FC) + Variable costs (VC)

9. Types of costs Examples of Hannah’s start-up or operating costs Example of Hannah’s fixed or variable costs

10. TasksAssessment criteria Task 1P1 Task 2P2 Task 3P3 Task 4M1 Task 5P4 and P5 Task 6M2 Task 7P6 and M3 Task 8D1