Turnover, Costs of sales and Gross profit

Question 1

Turnover is the value of sales generated by an enterprise from selling goods and services.
When do enterprises usually calculate turnover?

Answer 1

Enterprises usually calculate turnover:
1) Once a week
2) Monthly
3) Annually

Question 2

Sometimes an enterprise will offer its customers a discount on the price of its products.
What are net sales?

Answer 2

Net sales are the value of discounts minus the value of turnover

Question 3

Calculating turnover:
Turnover =

Answer 3

Turnover = Price per item x Quantity sold

Question 4

Calculating turnover:
Turnover = Price per item x Quantity sold

For example, a sports shop sells 500 pairs of running shoes, priced £42.50, a month. Its monthly turnover of running shoes is:

Answer 4

For example, a sports shop sells 500 pairs of running shoes, priced £42.50, a month. Its monthly turnover of running shoes is:

£42.50 x 500 = £21,250

Question 5

Cost of sales:
Products cost money to make. This is the cost of sales.
What is cost of sales also known as?

Answer 5

Cost of sales is also known as cost of goods sold

Question 6

Cost of sales:
Products cost money to make. This is the cost of sales.
Cost of sales is also known as cost of goods sold.

Cost of sales varies depending on the product made. It includes the cost of what?

Answer 6

It includes the cost of all the various items required to make a product

Question 7

Cost of sales:
Products cost money to make. This is the cost of sales.
Cost of sales is also known as cost of goods sold.

Cost of sales varies depending on the product made. It includes the cost of all the various items required to make a product.
Example

Answer 7

For example, the cost of sales of a ready meal will include:
1) The individual ingredients
2) The packaging

Question 8

Cost of sales:
Products cost money to make. This is the cost of sales.
Cost of sales is also known as cost of goods sold.

Cost of sales varies depending on the product made. It includes the cost of all the various items required to make a product.
For example, the cost of sales of a ready meal will include the individual ingredients and the packaging.
How is cost of sales calculated?

Answer 8

Cost of sales is calculated by adding together the cost of the individual items

Question 9

Calculating gross profit:
What is the formula for gross profit?

Answer 9

The formula for gross profit is:
Gross profit = Turnover - Cost of sales

Question 10

Calculating gross profit:
The formula for gross profit is:
Gross profit = Turnover - Cost of sales

Where can I find an example of this?

Answer 10

I can find an example of this on page 24 of the revision guide