English Learning Guide

Competency 2
Unit 2: Maths
Workshop 3
Centro de Servicios Financieros- CSF
Name: Cohort: Date:

Training program: Instructor:

BUSINESS COSTING
(PERCENTAGE/COST/PRICES/RATES/TAXES/LOANS/EXPENSES)

This workshop attempts to help you strengthen your Math skills in English and business vocabulary, using the
language in the development and understanding of different activities referred to percentage, prices, rates,
taxes, loans and expenses.

Objective: from the development of this workshop, you will be able to talk about business costing and what
companies do to improve their business.

1. Work in pairs and discuss:

- What do you understand for business costing?
- What do you think determines the price of an item for sale in a company?
- Mention one example of pricing items to improve sales in a company you know.

2. Look for the definition of the following words and give some examples.

COST: _________________________________________________________________________
PRICE: __________________________________________________________________________
PERCENTAGE: _____________________________________________________________________
RATE: ___________________________________________________________________________
TAX: _____________________________________________________________________________
LOAN: __________________________________________________________________________
EXPENSE: __________________________________________________________________________

3. Skills practice: do the following activities to practice the learnt vocabulary and English structures.

3.1. READING PRACTICE: Read about business costing

Before reading the text, identify the following vocabulary. Find the definition and use every word in one
example.
fixed cost, variable cost, direct cost, indirect cost, payments, book cost, compute, profit,
loss, filing returns, income, raw material, wage of labor, output, rent, salaries,
depreciation, supervision, maintenance

GC-F -005 V. 01
 English Learning Guide
Competency 2
Unit 2: Maths
Workshop 3
Centro de Servicios Financieros- CSF
Business Cost1

Definition: The Business Cost includes all the costs (fixed, variable, direct, and indirect) incurred in
carrying out the operations of the business. It is similar to the real or actual costs that include all
the payments and contractual obligations along with the book cost of depreciation on both the
plant and equipment.

The firms compute their business cost to determine the profit and loss and for filing returns for
income tax. It is also used in several other legal procedures. There are several types of business
costs:

Variable Cost: The variable cost is the cost which changes with the change in the production. Such
as: raw material, wages of labor, energy used in production, etc.

Fixed Cost: The fixed cost is the cost which remains fixed irrespective of the level of output. Such
as rent, salaries of employees, advertising, and promotional campaigns, etc.

Direct Cost: The direct cost is the cost which can be assigned to the production of certain goods
and services. Such as labor, material, fuel, power or any other expense related to the production
of a product is the direct cost.

Indirect Cost: The indirect cost is the cost which cannot be directly attributed to the production of
goods and services. Depreciation, supervision, security, maintenance and administrative expenses
are the cost incurred which cannot be assigned to a specific product or department and hence are
classified as an indirect cost.

Thus, the business cost is computed to determine the efficiency with which the firm is carrying out
its business operations.

After the reading, answer the following questions:

- What does the firm do to determine the profit and loss and for filing returns for income taxes?
___________________________________________________________________________________

- Mention the 4 types of costs for running businesses.

______________, ______________________, _____________________, ____________________

- What concepts can be assigned to Direct Costs?

________________________________________________________________________________

1
Taken from https://businessjargons.com/business-cost.html Used by SENA for academic purposes, exclusively.

GC-F -005 V. 01
 English Learning Guide
Competency 2
Unit 2: Maths
Workshop 3
Centro de Servicios Financieros- CSF
- Define the Indirect Cost. Use your own words.
___________________________________________________________________________________

3.2. LISTENING PRACTICE: listening what it costs to run a restaurant2

Before listening: Work in pairs and discuss the following questions.

- Talk about how popular restaurants in your city. Describe the type of food you can get
there.
- Describe a restaurant you like eating at and one where you don’t.
- What do you think it is necessary to run a restaurant? Give some examples. Use a
restaurant you know as an example.

To watch the video follow this link: https://www.youtube.com/watch?v=pv5cwM5vmeg

Look for the following words definition in English and their corresponding word in Spanish.

CEO, employees, owner, cents, net profit, expenses, sales, labor cost, gross wage,
utilities, repair, maintenance, supplies, silverware, pest control, liability insurance,
manager, staff, busy, empty, open, close, diligent, conscious, minimize, waste, spoilage,
afford, overtime, reliable business.

Compute and establish the percentage of the following expenses presented in the video

EXPENSES -CONCEPT %
Labor cost
Food supplies

Utilities
Repairs & Maintenance/ Marketing & Advertising/Direct Operating
Expenses/ General & Administrative Interests/ Occupancy cost=

What is the percentage for the Net profit of the restaurant based on a dollar income? _______

According to the video, mark the following statements as TRUE (T) or FALSE (F)

- Restaurant owners usually can take more than the 30% of their sales income _____
- The most expensive wage in a restaurant is the Labor Cost ______
- Food supplies is also part of the utilities of the restaurant ______

2
Taken from: https://www.youtube.com/watch?v=pv5cwM5vmeg Used by SENA for academic purposes, exclusively.

GC-F -005 V. 01
 English Learning Guide
Competency 2
Unit 2: Maths
Workshop 3
Centro de Servicios Financieros- CSF
- Legal & accounting, security services, computer and software fees, liability insurance and
credit/debit card transactions, belong to the General and Administrative expenses _____

Now, classify the expenses into the types of cost presented in the reading section.

Labor cost/ Food supplies/ Utilities/ Repairs & Maintenance/ Marketing & Advertising/Direct
Operating Expenses/ General & Administrative Interests/ Occupancy cost

VARIABLE COST FIXED COST

DIRECT COST INDIRECT COST

3.3. SPEAKING PRACTICE: Advertising campaign

Pretend you’re still working at the advertising agency and plan a marketing campaign based on
the products / services of your model company.

- Draw/design a sales magazine, advertising products. Include: sale measurements

(package/pounds/kilograms/tons/boxes, etc), price, etc.
- Present your magazine to the class.

3.4. WRITING PRACTICE: Business cost of your model company

Make up the cost for running your model company Take into account the expenses and costs
studied.

4. Extension activities: the extension activities will help you improve your performance in the topics. You
need to reach at least five hours of practice on your own.

- For emphasis in the concept of fees go to https://www.eslfast.com/robot/topics/bank/bank12.htm

- Practice listening comprehension about Spending money, expenses and loans at https://www.esl-
lab.com/money/moneyrd1.htm
- To deepen your knowledge on percentage, visit: https://www.mbatious.com/topic/64/three-
concepts-in-percentage-to-tackle-quant

GC-F -005 V. 01
 English Learning Guide
Competency 2
Unit 2: Maths
Workshop 3
Centro de Servicios Financieros- CSF
- To learn more about costing concepts visit: https://businessjargons.com/business-cost.html also
visit: https://www.investopedia.com/ask/answers/041415/what-are-different-types-costs-cost-
accounting.asp

GC-F -005 V. 01