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Chapter 11
Calculating costs, revenue and profits

Price ­ the amount paid by a consumer to purchase one unit of a product

Total revenue ­ the income received from an organisation's activities.

Total revenue = price per unit x quantity of units sold

Profit- the differences between the income of…

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Cost

Classifying costs

2 principle reasons for classifying costs

- To assess the impact of changes in output on the cost of production

- To calculate the costs of making a particular product in a multi- product company



Cost and output

Fixed costs ­ costs that do not vary directly…

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