Revenue, costs and profit Flashcards
1
Q
What is revenue?
A
The money received from sales of goods or services.
2
Q
What is the formula for revenue?
A
Selling price x quantity sold.
3
Q
What are fixed costs?
A
Costs that don’t change with output.
4
Q
What are examples of fixed costs?
A
Rent
Salaries
Cost of new machinery
5
Q
What are variable costs?
A
Costs that do change with output.
6
Q
What are examples of variable costs?
A
Raw materials
Hourly wages
Packaging costs
7
Q
What is profit?
A
The difference between revenue and costs.
8
Q
Why is profit important?
A
It motivates people
Rewards shareholders
Attracts investors
9
Q
What can businesses do with profit?
A
Re-invest in the business
Pay dividends
Fund projects in the community
