Revenue, costs, profits and losses

Question 1

Variable costs

Answer 1

costs that change as output changes
E.g wages, stock costs as more products are being sold

Question 2

Fixed costs

Answer 2

Costs that stay the same regardless of a change in output
E.g rent, tax costs, interest rates

Question 3

Total Costs

Answer 3

Fixed costs + Variable costs

Question 4

Gross profit

Answer 4

Cost of goods sold - total revenue

Question 5

Net profit

Answer 5

Net profit is the sales income - all the business costs and expenses