Cost, Revenue, Profit

Question 1

Total costs =

Answer 1

Fixed costs+ variable cost

Question 2

1. A business has fixed costs of £2000 per year, and produce 1000 items a year. Each item has a variable cost of £1. What is the total cost?

Answer 2

1x1000=1000
1000+2000=£3000

Total costs: £3,000

Question 3

2. A bakery makes cakes to order. The cost of the ingredients is 50p per cake and the bakery pays the baker £4 for each cake he makes. What is the variable cost of each cake?

Answer 3

0.50 + 4.50 = 4.50

Variable costs: £4.50

Question 4

Profit =

Answer 4

Revenue - Total costs

Question 5

1. A business has revenue of £4,000, and total costs of £3,200. Calculate its profit.

Answer 5

4000-3200 = 800

Profit = £800

Question 6

2. A business has a selling price of £20 and sells 200 per month. It has total costs of £2750. Calculate its profit

Answer 6

20 x 200 = 4000
4000 - 2750 = 1250

Total costs = £1250

Question 7

3. A business who sells chairs has fixed costs of £3000 and a variable cost of £25 per chair. It sells 75 chairs a month. It has a revenue of £6500. Calculate its profit

Answer 7

25 x 75 = 1875
1875 + 3000 = 4875
4875 - 6500