2.2.2 Sales, Revenue and Costs Flashcards
sales volume
number of units sold by a business
sales revenue
value of units sold by a business
sales revenue equation
sales revenue= selling price x number of units sold
relationship between sales revenue and volume
as revenue increases, volume increases
how to computer systems help businesses
make it easier to track sales revenue when multiple products are sold by the business
3 categories of costs
fixed
variable
total
fixed costs
costs that do not change as the level of output changes
variable costs
costs that vary directly with the output
total costs
sum of the fixed and total variable costs
total costs equation
total fixed costs + total variable costs
total variable cost equation
variable cost x quantity
average total cost equation
total cost/ quantity
variable cost per unit equation
total variable costs/ quantity
contribution
a product’s selling price minus the variable costs directly involved in producing that unit
contribution equation
contribution= selling price per unit - variable cost per unit
