1. revenue, cost and profit Flashcards
1
Q
revenue
A
the money a business makes from sales
revenue = selling price per unit x quantity of units sold
2
Q
fixed cost
A
do not change with output e.g rent, salaries
3
Q
variable cost
A
do change with output e.g hourly wages, raw materials
vc= variable cost per unit x number of units sold
4
Q
semi variable costs
A
fixed and variable parts. e.g phone bills
5
Q
total cost
A
fixed cost + variable cost
6
Q
profit
A
the difference between revenue and costs
revenue - total cost
7
Q
profit importance
A
- motivate people (dividend payments)
- good source of finance (used for investments)
- attract investors (high profit = investors more likely to buy shares)
