Unit 33. Costs. Assets and Liabilities Active Vocabulary

costs output fixed costs variable costs direct costs indirect costs overhead cost/overheads expenses/expenditure assets and liabilities fixed assets current assets receivables	витрати, видатки продукція, випуск, виготовлення обсяг виробництва основні затрати змінні витрати прямі затрати непрямі, посередні витрати накладні витрати витрати, видатки активи та пасиви неліквідні активи, основний капітал поточні оборотні активи рахунки дебіторів, дебітори
deposit generate long-term liabilities current liabilities be due to	депозит, вклад в банк створювати довгострокові зобов’язання (пасиви) короткострокові зобов’язання (пасиви) бути зобов’язаним, підлягати виплаті

The money that a business spends in order to produce goods or services is its costs. Different business have different cost structures and define and calculate their costs in different way. One way of classifying the costs of business is to relate them to the output of the firm.

Fixed costs are those which remain unchanged whatever the level of output, e.g. rent, interest charges, salaries, variable costs change directly with output of the business.

Direct costs are directly related to the things produced. In manufacturing for example direct costs include raw materials and wages.

Indirect costs may include things like social security charges on the top of the wages.

Overhead costs or overheads are used to mean different things, but usually cover all the regular non-production costs of running a business, such as salaries and telephone bills; they may include the cost of marketing.

Costs are also referred to as expenses or expenditure.

Things of value owned by a firm are its assets. Fixed assets are long-term assets which are for use in the business and not re-sale (land, buildings, furniture, etc.).

Current assets are used in the course of business. They include cash, receivables, bank deposits and investments in other companies.

The assets help generate the income of the company.

Liabilities are what a business owes to those outside the business.

Liabilities are classified as either long-term liabilities which are due for repayment after more than one year, or current liabilities which are short-term debts and debts to suppliers the company expects to pay within one year.

Exercise 1. Give the English for:

виробляти товари та послуги; витрати; структура витрат; підраховувати витрати; основні витрати; обсяг виробництва; заробітна платня; змінні витрати; прямі витрати; сировина; непрямі витрати; накладні витрати; активи та пасиви; неліквідні активи; перепродаж; поточні оборотні активи; готівка; рахунки дебіторів; дохід компанії; довгострокові (короткострокові) зобов’язання; борг.

Exercise 2. Match sentences with the correct definition from the list below:

1. the money that a business spends in order to produce goods or services; the quantity of good produced; the money spent to run a business, such as rents, salaries, heat, etc. items of value to a person, business, or institution; money owed by company; a debt; money that is owed to a business; a sum of money paid into a bank; an amount of money spent; debts that are payable on demand or within one year; 10. money owed that does not have to be repaid until some future date; 11. the cost of materials, labour, etc, involved in marketing a product;

a) liabilities b) costs c) assets d) overheads e) direct costs f) current liabilities g) expenditure k) long-term liabilities l) deposit m) receivables n) output

Exercise 3. Translate the sentences into Ukrainian. Write the appropriate word or phrase in the following sentences:

assets, generate, due, liabilities, expenditure, fixed costs, current liabilities, debts, output, costs, expenses.

1. We had to increase prices this year just to cover our … .

2. Factory workers have increased … by 10%.

3. It took him years to pay off all his ... .

4. … are bills that the company expect to pay in the near future.

5. … include rent.

6. Updating these machines will increase our … this year.

7. The company does not have enough money to meet its … .

8. He is … to pay his debts.

9. The assets help … the income of the company.

10. The company was forced to sell off its … .

11. Telephone bills, payroll, and rent are some of our monthly … .

Exercise 4. Answer the following questions:

1. What are the costs?

2. Do the different business have similar cost structures ?

3. How can the costs be classified?

4. What are the fixed costs?

5. Do variable costs remain unchanged whatever the level of output?

6. What are the direct costs related to?

7. What do indirect costs include?

8. What do overheads mean?

9. What are the assets?

10. How are fixed assets distinguished from the current assets?

11.What are the liabilities?

12.How are the liabilities classified?

13. What is the difference between long-term liabilities and current liabilities?