2.2.2 Sales, revenue and costs

Question 1

What is sales volume?

Answer 1

Number of units sold by a business

Question 2

What is sales revenue?

Answer 2

Value of units sold by a business

Question 3

Fill in the blank: Revenue is equal to _______.

Answer 3

selling price * quantity sold

Question 4

What are fixed costs?

Answer 4

Costs that do not change as the level of output changes

Question 5

What are variable costs?

Answer 5

Costs that vary directly with the output

Question 6

What is the formula for total costs?

Answer 6

Total costs = fixed + total variable costs

Question 7

How do you calculate total variable costs?

Answer 7

Total variable costs = variable cost per unit * quantity sold

Question 8

What is the formula for average total costs?

Answer 8

Average total costs = Total variable costs / Quantity

Question 9

What is the formula for variable cost per unit?

Answer 9

Variable cost per unit = Total variable costs / Quantity

Question 10

What is contribution?

Answer 10

Selling price - variable cost per unit