Understanding and calculating revenue, costs, and profit

• How is total cost calculated?

  Fixed costs + Variable costs
• Understanding and maximizing revenue is essential for a business to be profitable and sustainable
• Profit is the money a business has left after subtracting total costs from total revenue
• Revenue represents the total income generated from sales.

  True
• The formula for profit is: Profit = Total Revenue - Total Costs
• Understanding and maximizing profit is essential for a business to be sustainable
• Profit is calculated by subtracting total costs from total revenue.

  True
• Revenue is calculated by multiplying the price of a product or service by the quantity sold.


  True
• Variable costs increase or decrease based on the quantity produced.


  True
• Steps to calculate revenue using the formula

  1️⃣ Identify the price of each product or service

  2️⃣ Identify the quantity sold

  3️⃣ Multiply price by quantity
• What are fixed costs for a business?

  Expenses that do not change
• What is profit for a business?

  Surplus after costs are deducted
• What is total revenue defined as?

  Total income from sales
• What is the definition of revenue for a business?

  Total money from sales
• Profit is calculated by subtracting total costs from total revenue.


  True
• What are the two main types of costs for a business?

  Fixed and variable
• Match the term with its definition:

  Profit ↔️ Money after subtracting costs

  Total Revenue ↔️ Income from sales
• What is an example of a fixed cost?

  Rent
• Order the steps to calculate profit:

  1️⃣ Calculate total revenue

  2️⃣ Calculate fixed costs

  3️⃣ Calculate variable costs

  4️⃣ Add fixed and variable costs to find total costs

  5️⃣ Subtract total costs from total revenue
• Profit is the money left after subtracting total costs from total revenue.


  True
• What is the formula for calculating revenue?

  Revenue = Price x Quantity
• What are the two main types of costs in a business?

  Fixed and variable costs
• What is revenue for a business?

  Total money earned from sales
• If a business sells each widget for £15 and sells 200 widgets in a month, what is the revenue?

  £3,000
• What are variable costs for a business?

  Expenses that change with output
• The formula to calculate profit is Revenue minus Total Costs


  True
• Calculate revenue using the formula: Revenue = Price x Quantity
• What two factors are multiplied to calculate revenue?

  Price and quantity
• What is an example of a variable cost?

  Raw materials
• What is the formula for calculating profit?

  Total Revenue - Total Costs
• Profit is essential for reinvestment or distribution to shareholders.


  True
• What is the formula for calculating profit?

  Profit = Revenue - Costs
• Match the business term with its definition:

  Profit ↔️ Money remaining after subtracting total costs from total revenue

  Total Revenue ↔️ Total income generated from sales

  Total Costs ↔️ Sum of fixed and variable costs
• Revenue is the total amount of money a business receives from selling its products or services
• Fixed costs are costs that do not change with the level of output
• The formula to calculate revenue is Price multiplied by Quantity.
• Total costs are calculated by adding fixed costs and variable costs


  True
• If a business has fixed costs of £50,000 and variable costs of £30,000, the total costs are £80,000.
• If a business has total revenue of £100,000 and total costs of £80,000, the profit is £20,000.