COST Revenue profit Lesson objectives Difference between fixed
COST, Revenue , profit
Lesson objectives Difference between fixed and variable costs. Difference between direct and indirect costs. Difference between costs and revenue.
2 mins starter… List as many costs in bread factory as you can…. Which are Fixed and Variable costs?
BREAD FACTORY FIXED COSTS VARIABLE COSTS Rent Wages
Costs Fixed Costs (FC) – Do not change with output. Variable Total costs (VC) change with output. costs (TC) = FC + VC Average Cost (AC) = TC/Quantity
Direct v Indirect Direct costs = Variable costs Indirect costs = Fixed costs
Revenue 2 girls sell 18 glasses of lemonade for $10. How much money do they make? 18 x $10 = $180 Total Revenue (TR) is total sales TR = Price x Quantity
Profit This is what the entrepreneur gets after all costs have been paid. Profit is the driving force behind every business and firm in operation. Profit = TR – TC.
Can you figure out equations for Revenue ____ x____ Profit = ___ - _____ Total cost = ___ + VC Fc = VC = AVERAGE COST = ____
Diagrams FC VC TR
Lesson objectives Difference between fixed and variable costs. Difference between direct and indirect costs. Difference between costs and revenue.
- Slides: 12