Revenue, Costs and Profit
- Created by: kennedyb15
- Created on: 08-05-19 14:14
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- Revenue, Costs and Profit
- •Fixed costs – have to be paid even if no products are sold (e.g. rent of ice cream shop)
- •Variable costs – increase by a step every time an extra product is sold.
- Variable cost = variable cost per unit x quantity produced Total costs = Variable costs + fixed costs
- •Revenue = money coming into a business
- Total revenue = sell price x qty sold
- Gross profit considers revenue and cost of production
- Net profit considers gross profit and operating costs
- Gross profit = revenue - cost of sales
- Net profit = gross profit - running costs
- Break even = Fixed costs Sell price – cost per unit
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