2.2.2 Sales, Revenue And Costs Flashcards
Sales volume
The amount of sales expressed as the number of units sold
Sales revenue
Is the amount of sales expressed as the total sum of money spent by customers
Fixed costs
Fixed costs do not change as output varies
Variable costs
Costs which change when the output changes
Total costs =
Fixed costs + variable costs
Sales volume =
Sales revenue / selling price
Sales revenue =
Selling price x quantity sold
Total variable costs =
Number of units sold x variable costs per unit
Description of revenue on graph
Increases with the amount of units sold and therefore starts at 0 and slopes upwards when shown on graph
Description of fixed costs on graph
Fixed costs remain the same regardless of output so are shown as a straight horizontal line when shown on a graph
Description of variable costs on graph
Change in relation to the number of items produced
Where is the break even output on a graph
Where the revenue meets total costs
Total variable costs =
Average variable costs x quantity
Total costs =
Fixed costs + total variable cost
