3.2a Estimating Revenue Flashcards
What is estimated revenue?
The estimated amount of money to be taken in by the company.
What is revenue?
Revenue is the income that a business receives from sales.
How is revenue calculated?
Revenue = price x quantity
What are fixed costs?
Cost that do not change no matter how many products or services a business sells.
What are variable costs?
Cost that change depending on how many products or services the business sells.
What are 2 examples of variable costs?
Raw materials, commissions, staff wages.
What are 2 examples of fixed costs?
Insurance, rent, taxes
What is profit?
profit is the surplus left from revenue after paying all costs.
How do you calculate profit?
profit = total revenue - total costs.
Give 3 examples of what a business can do with profit?
reward owners, invest in growth ,save for the future, in case there is a downturn in revenue
