29 Sales, Revenue, Costs

Question 1

Define variable costs and how it is calculated

Answer 1

variable costs are costs that rise as output rise.

T.C = V.C per unit x output

Question 2

Define sales volume

Answer 2

sales volume is the quantity of units sold.

Question 3

Define profit(loss) and how is it calculated

Answer 3

profit or loss is the difference between total costs and total revenue.

total revenue - total costs

Question 4

Define fixed costs

Answer 4

fixed cost is a cost that does not change as a result of a change in output in the short run.

Question 5

Define sales revenue and how it is calculated

Answer 5

sales revenue is the value of output sold in a particular time period.

price x quantity of output

Question 6

Define sales revenue and how it is calculated

Answer 6

sales revenue is the value of output sold in a particular time period.

price x quantity of output

Question 7

Define revenue

Answer 7

revenue is the amount of money a business receives from the selling goods and services.

Question 8

Define average cost or unit cost and how to calculate it

Answer 8

average cost is the cost of producing one unit.

total cost / output

Question 9

Define total cost

Answer 9

total cost is the entire cost of producing a given level of output.

Question 10

Define short run and long run

Answer 10

short run is the time period where at least one factor of production is fixed.

long run is the time period where all factors of production are variable.

Question 11

How does a business improve sales volume?

Answer 11

• advertising
• extending product range
• promotion
• extend distribution networks
• develop relationship with customers
• have a target audience

Question 12

How does a business improve sales revenue?

Answer 12

• changing the price based on PED or other factors
• adding complementary services to products