Question

Match the different methods used for calculating revenue and profit to the formulas used for calculating them. total revenue average revenue marginal revenue gross profit net profit

Answer 1

Answer:

See explanation below

Explanation:

1) Total Revenue:

Total revenue refers to the total amount of income that is generated when a company sells or offers their service.

It is usually calculated as the product of the product or services sold by the quantity.

It is calculated by ;

TR = Q * P

Where TR = Total Revenue

Q = Quantity

P = Price

2.) Average Revenue:

Average revenue is the revenue gotten by a company per unit of output sold. It is calculated by:

AR = TR / Q

Where AR = Average Revenue

TR = Total Revenue

Q. = Quantity

3.) Marginal Revenue:

This is the net revenue that is generated by selling an additional unit of commodity; which is the change in total revealer unit. It is calculated by:

MR = change in Total Revenue / change in Quantity

Where MR = Marginal Revenue

4.) Gross Profit:

Gross profit is the amount of revenue left after factoring out the cost of production and sales and servicing.

It is calculated by subtracting revenue from the cost of goods sold -

Gross Profit = Revenue - Cost of goods sold

Net Profit:

Net profit is the amount of money a company has left after subtracting all interests, tax expenses and cost.

It is calculated by;

Net Profit = Gross Profit - Expenses