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Description
Flashcards by Maxwell Pearcy, updated more than 1 year ago
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Created by Maxwell Pearcy
over 7 years ago
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| Question | Answer |
| What is Revenue? | Revenue is the amount of income received from selling goods or services over a period of time. |
| What is the formula to work out revenue? | Price x Quantity = Total revenue |
| What are the different types of costs? | Fixed Costs: They do not vary with the output produced by a business, e.g. salaries and business rates. Variable costs: They change directly with the number of products made, e.g. raw materials and labour. |
| What is the formula to work out variable costs? | Variable costs = Cost of one unit x Quantity produced |
| Total Costs | Total Costs are all of the costs of the business. It can be calculated using the formula: Fixed Costs + Variable Costs = Total Costs |
| If the fixed costs are £400 and the variable costs are (£5 x 100) then what are the total costs? | £400 + £500 = £900 |
| Profit and loss | Profit occurs when revenues of a business are greater that its total costs. If a business's costs are greater than its revenues then it will make a loss. |
| What is the formula to work out profit and loss | Total Revenue - Total costs = Profit or Loss £1000 - £900 = £100 profit |
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