Revenue, cost and profit Flashcards
What is revenue?
Revenue is the total income generated from the sale of goods or services.
True or False: Profit is calculated by subtracting total costs from total revenue.
True
Fill in the blank: Total costs consist of fixed costs and _____ costs.
variable
What is the formula for calculating profit?
Profit = Total Revenue - Total Costs
Multiple Choice: Which of the following is a fixed cost? A) Rent B) Raw materials C) Wages based on sales
A) Rent
Define variable costs.
Variable costs are expenses that change in proportion to the level of goods or services produced.
What happens to profit if total revenue increases while costs remain the same?
Profit increases.
True or False: A business can have high revenue but still incur a loss.
True
What is the impact of increasing fixed costs on profit, assuming revenue remains unchanged?
Profit decreases.
Fill in the blank: The break-even point occurs when total revenue equals _____ costs.
total
