Answer:
See the explanation for the answers.
Explanation:
(a)
Revenue can simply be defined as the income you get from the sales of products at different at a given price.
We have different methods used for calculating revenue. The most important ones are given below;
1.Total Revenue: The income earned by a seller or producer after selling the output is called the total revenue. the formula is given as;
Total revenue = Price per unit * Quantity sold
2. Average Revenue:Average revenue refers to the revenue obtained by the seller by selling the per unit commodity. The formula is given as;
Average revenue = total revenue/total output
3. Marginal Revenue: Marginal revenue is the net revenue obtained by selling an additional unit of the commodity. The formula is given as:
Marginal revenue = change in total revenue/change in output
(b)
Profit is the revenue remaining after all costs are paid. These costs include labor, materials, interest on debt, and taxes. The different methods used for calculating profits are;
1. Gross Profit : Gross Profit is the revenue left to fund your business after paying for the cost of creating your product or service. The formula is given as;
Gross profit = Revenue - cost of goods sold
2. Operating Profit : Operating Profit is the revenue left after accounting for the cost of producing your product or service and the cost of running your business. The formula is given as;
Operating profit = Revenue - cost of goods sold -operating expenses
3. Net Profit : Net profit is the revenue left once you take away all costs, taxes and interest. The formula is given as;
Net profit = Revenue - cost of goods sold -operating expenses- interest -tax