Revenue,cost and profits

Question 1

Revenue

Answer 1

Revenue is the money a business makes from sales; in other words, it is the value of the sales. (It is also referred to as turnover.)

Question 2

total revenue formula

Answer 2

Price x Quantity

Question 3

profit formula

Answer 3

profit =total revenue - total costs

Question 4

Fixed costs

Answer 4

Fixed costs are costs that do not vary with output. No matter how much is made or how little is sold, fixed costs still have to be paid.

Question 5

variable costs

Answer 5

Variable costs are different from fixed costs in that they vary in direct proportion to output - as output increases, variable costs increase; as output falls, variable costs fall.

Question 6

Direct costs

Answer 6

Direct costs are costs that arise specifically from the production of a product or the provision of a service. Examples of direct costs include:
materials or components
direct labour
some expenses, e.g. copyright payments on a published book or licence fees for use of patents.