Question

Khalifa’s friend, Khalid, has told him that managing the finances of the business is very important.

Q1a. What are fixed costs?

Q1b. What are variable costs?

Q1c. What is revenue?

Q1d. Explain the difference between revenue and profit.

Answer 1

1. Fixed costs are usually negotiated for a specified time period and do not change with production levels. ... Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.
2. Variable costs are dependent on production output. ... Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs. The total variable cost is simply the quantity of output multiplied by the variable cost per unit of output.
3. Fees earned from providing services and the amounts of merchandise sold. Examples of revenue accounts include: Sales, Service Revenues, Fees Earned, Interest Revenue, Interest Income. ... Revenue accounts are credited when services are performed/billed and therefore will usually have credit balances.
4. Revenue is the total amount of income generated by the sale of goods or services related to the company's primary operations. ... Profit is the amount of income that remains after accounting for all expenses, debts, additional income streams, and operating costs.

Step-by-step explanation: