Costs, revenues & profits

• What is the formula for total revenue?

  price x quantity sold
• Define fixed costs

  Costs that do not change with output
• Give an example of fixed costs

  • rent
  • salary
• Define variable costs

  costs that change with output
• Give an example of variable costs

  • wages
  • raw materials
• How is gross profit calculated?

  Revenue - cost of sales
• How is net profit calculated?

  gross profit - expenses