2.2.2 SALES, REVENUE & COSTS

• Average costs

  • The cost of producing one unit.
  • Total costs / output
• Fixed costs

  Costs that do not change when output/sales changes
• Revenue

  • The amount of income for a business generated from its sales
  • Selling price x quantity sold
• Sales revenue

  • Selling price x sales volume
  • Price multiplied by quantity sold
• Total costs

  Total fixed costs + total variable costs
• Variable costs

  Costs that vary according to the level of output