All businesses should keep proper accounts. This involves the calculation of revenue, costs and profit.
What does 'total cost' mean?
The total income earned by a firm
The total expenses of a firm
The total amount of profit earned by a firm
What does the amount of revenue a business earns each month depend on?
Both selling price and quantity sold
What is revenue sometimes called?
An increase in output does NOT mean an increase in:
A firm sells 10 units at £5 each. Its total costs are £30. How much profit is made?
A £50 profit is made
A £20 profit is made
A £20 loss is made
How do you calculate profit?
Subtracting total costs from total revenue
Subtracting total revenue from total costs
Multiplying the quantity sold by price
How do you calculate total revenue?
Quantity sold x average price
Quantity sold x average cost
Quantity sold x average profit
When is a business making a loss?
When revenues are higher than costs
When revenues equal costs
When revenues are less than costs
When is a business making a profit?
If a company reduces a product's price, what does this mean for their revenue?
There will be an increase in revenue
There could be an increase or decrease in revenue
There will be an decrease in revenue