Revenue,cost And Profit Flashcards
What is revenue?
Revenue is the income earned by a business from selling its goods and services
What is the calculation for revenue?
Revenue = price*quantity
Why do businesses calculate cost?
To access wether they can make a profit
To help making pricing decisions
For forecasting and budgeting
What is a fixed cost?
A cost that does not change with the level of output
What is a variable cost?
A cost that changes directly with the level of output
What is a variable cost?
A cost that changes directly with the level of output
How do you calculate total cost
Fixed cost + Variable cost = total costs
What is profit?
Profit is the reward for risk-taking
How do you calculate profit?
Profit = total revenue - total costs
How can a Business use profit
-reinvest and expand
-reward owners
-for businesses to survive
-For businesses to remain competitive
-to save for the future
