2.2.2 Sales, Revenue And Profit Flashcards
1
Q
Demand
A
The amount of products that customers are prepared to buy.
2
Q
Sales volume
A
The number of units sold by a business.
3
Q
Revenue
A
The value of sales in a given time period.
4
Q
Revenue formula
A
Volume sold x Average selling price per unit
5
Q
How can a business increase revenue?
A
- Increase quantity sold.
- Achieve a higher selling price.
6
Q
Costs
A
Amount that a business incurs in order to make goods and/or product services.
7
Q
Fixed costs
A
Costs which do not change as output varies e.g. rent, marketing, salaries, insurance, interest payments.
8
Q
Variable costs
A
Costs which do change as output varies e.g. raw materials, packaging, wages, postage/shipping.
9
Q
Total variable costs
A
VCPU x Volume sold
10
Q
Profit
A
Reward or return for taking risks and making investments.
11
Q
Profit formula
A
Total revenue - Total costs
