3.3 Costs and Revenue

Question 1

Profit = ?

Answer 1

Revenue - Cost

Question 2

Revenue

Answer 2

the income received from the sale of a good or service

Question 3

How to calc revenue

Answer 3

p x q

Question 4

Revenue streams

Answer 4

the income a business gets from different business activity
most common is selling goods and services
can also generate from:
advertisement
merch
transaction fees
sponsorships

Question 5

Pros and cons of revenue streams

Answer 5

P: allows the business to generate extra revenue and profit
P: dont have to rely on one source of revenue as much
C: may distract the business from its core process

Question 6

Fixed costs

Answer 6

costs that do not vary with output in the short run

Question 7

Variable costs

Answer 7

costs that increase as ouput increases

Question 8

Calculations of total costs

Answer 8

fixed costs + Variable costs

Question 9

Direct costs

Answer 9

costs that can be clearly identified with production of each unit of production or a project
EX:
cost of meat in hamburgers
cost business teacher in business education

Question 10

Indirect/Overheads

Answer 10

costs that cannot be clearly identified with each unit of production
Costs that don’t contribute to production but keep the company going
EX:
CEO salary
promotional expenditure in supermarket
cost of cleaning school

Question 11

Examples of fixed overheads and Variable overheads

Answer 11

Fixed : CEO salary
Variable : Cost of cleaning a school