2.2.2 - Sales, Revenue and Costs

Question 1

What is sales volume, and how is it calculated?

Answer 1

Sales volume refers to the number of units or items sold by a business. It can be calculated using the formula:

SalesVolume= SellingPrice ÷ Revenue

Question 2

What is sales revenue, and how do you calculate it?

Answer 2

Sales revenue is the total value of the units or items sold by a business. It can be calculated using the formula:

Sales Revenue = Selling Price x number of units sold

Question 3

What is a fixed cost? Provide examples.

Answer 3

A fixed cost is a cost that does not change with the level of output or sales.

Examples of fixed costs include rent, salaries, interest on loans, and insurance.

Question 4

What is a variable cost? Provide examples.

Answer 4

A variable cost is a cost that changes in relation to output or sales.

Examples of variable costs include raw materials, packaging, and commission payments.

Question 5

How do you calculate total costs in a business?

Answer 5

TotalCosts = TotalFixedCosts + TotalVariableCosts