6.3 Flashcards
1
Q
What is profit?
A
Profit is the money gained in total revenue is greater than total cost for periods of time.
2
Q
How can a break even charge help a business?
A
Identifies sales quantity needed to make a profit at a certain price and cost. A business can use it to judge the most appropriate price and cost to profit from a market.
3
Q
What is contribution?
A
Contribution is the difference between the sale price and the cost of materials of a product.
4
Q
How is contribution calculated?
A
Price of one product - cost of material for one product = contribution
