Making a Profit Flashcards
1
Q
What is Cost of sales?
A
Cost of sales is the money used to make the product and will include the materials, wages for employees who produce the product and any other costs producing the product.
2
Q
What is Gross profit?
A
It is the difference between the costs of making the product - the cost of sales - and the money customers pay - revenue.
3
Q
What is the formula for calculating the Gross profit?
A
Gross profit = Revenue - Cost of sales
4
Q
What is the formula for calculating the Net profit?
A
Net profit = Gross profit - Expenditure
5
Q
What is Net profit?
A
The actual profit after working expenses not included in the calculation of gross profit have been paid.
