2. Understand how businesses make a profit.

Give the formula for calculating revenue by choosing the correct words and inserting them in the right place:

Revenue = Number of sales x ............................

• Fixed costs

• Price per unit

• Start-up costs

• Variable costs

Answer explanation

Remember you will be calculating money received with this formula.

In a month , a business making computer desks sells 300 desks. The price of each desk is £30. What is their total revenue per month?

• £90 per month

• £900 per month

• £9,000 per month

• £90,000 per month

Answer explanation

Even if you can do these calculations in your head, use a calculator to check you are correct.

In a month , a business making computer desks sells 300 desks. The price of each desk is £30.

If they sell the same number every month, what is their total annual revenue?

• £108

• £9,000

• £18,000

• £108,000

Answer explanation

Even if you can do these calculations in your head, use a calculator to check you are correct.

Kamila has a van and sells ice lollies and candy floss at fairgrounds. The ice lollies sell for £1.00 and sticks of candy floss for £1.50. Yesterday Max sold 200 ice lollies and 300 bags of candy floss. What is his total revenue?

• £650

• £6,500

• £1,500

• £1,200

Answer explanation

Always look for the key term in a question. Here is total revenue.

Which TWO of the following are sources of revenue for a charity shop?

• Advertising the shop

• Donations from the public

• Paying rent for the shop

• Selling clothes

• Collection items to sell

Last week a charity shop held a book and DVD fair. It sold 1,200 books at 25p each and 500 DVDs at 20p each. Calculate the total revenue it earned.

• £40

• £400

• £425

• £450

Answer explanation

Do this task step by step:

1. Calculate revenue for the books

2. Calculate revenue for the DVDs

3. Add your answers together

A small business sells personalised T-shirts. Each one retails for £15. The business sold 10,000 T-shirts last year. Calculate the revenue for the business.

• Revenue = 10,000 x £15 = £1,500

• Revenue = 10,000 x £15 = £15,000

• Revenue = 10,000 x £15 = £150,000

• Revenue = 10,000 x £15 = £1,500,000

Jake is a greengrocer. Which TWO of these are items of expenditure for a greengrocer?

• Stock for the shop

• A bank loan for an extension

• Wages for an assistant

• Sales revenue

• Interest on savings account

Lucy runs a nail bar. Which TWO figures show her expenditure items this month?

• Rent £1,000

• Product sales £200

• Income from manicures £2,600

• Wages £1,400

Gary is a window cleaner. Last year his revenue was £40,000 and his expenditure was £10,000. Did he make a profit or loss?

• Profit

• Loss