2.2.2 Sales Revenue And Costs

Question 1

Definition of sales revenue

Answer 1

Cash that buyers pay you for goods.

It is calculated by price x quantity of output.

Question 2

Definition of variable cost

Answer 2

A cost that rises as output rises

Question 3

Definition of fixed cost

Answer 3

A cost that does not change as a result of a change in output in the short run

Question 4

Definition of profit

Answer 4

The difference between total costs and total revenue

Question 5

How do you calculate sales volume?

Answer 5

Sales revenue / selling price

Question 6

How do you calculate sales revenue?

Answer 6

Selling price x sales volume

Question 7

Examples of fixed costs

Answer 7

Rent, mortgage, loan payments, insurance, lease, salaries of mangers.

Question 8

How do you calculate total variable costs?

Answer 8

Average variable costs x quantity sold (sales volume)

Question 9

How do you calculate total costs?

Answer 9

Variable costs + fixed costs

Question 10

How do you calculate percentage change?

Answer 10

Change / original x 100