Sales Volume, Sales Revenue and Costs Flashcards
1
Q
Sales volume affects Sales Revenue
A
Sales Revenue = selling price x sales volume
Sales volume is the number of units sold in a given time period.
Sales revenue is the value of sales in a given time period. Also known as turnover
2
Q
Fixed Costs
A
Costs don’t change with output
Eg the cost of rent on a factory
3
Q
Variable costs
A
Costs rise and fall with output
Eg raw material costs and wages
4
Q
Total variable costs formula
A
Total variable costs = Average variable costs x quantity produced
5
Q
Total costs formula
A
Total costs = fixed costs + variable cost’s
6
Q
Profit formula
A
Profit = Total revenue - total costs
