Cost Revenue And Profit Examples

If every cookie cost 50 cents to make our revenue function becomes.

Cost revenue and profit examples. Calculating the profit function. To obtain the cost function add fixed cost and variable cost together. Calculate different types of cost. The profit function is just the revenue function minus the cost function.

The production of rice involves the following. 2 a business costs include the fixed cost of 5000 as well as the variable cost of 40 per bike. C 50 0 10 x lemonade 0 50 x cookie. The total revenue from selling 25 tables is 5000.

R x 200 x 200 25 5000. Profit 0 50 x 50 00 0 10 x. However in reality some costs are semi fixed in nature. 1 a soft drink manufacturer can produce 1000 cases of soda in a week at a total cost of 6000 and 1500 cases of soda at a total cost of 8500.

For example telephone expenses comprise a fixed monthly charge and a variable charge based on the number of calls made. Profit on the sale of fixed assets excess of cost overwritten down value. Revenue is income cost is expense and the difference revenue cost is profit or loss. To obtain the profit function subtract costs from revenue.

The price function p x also called the demand function describes how price affects the number of items sold. Profit earned in the ordinary course of business is called revenue profit. Know the concept of revenue. For our simple lemonade stand the profit function would be.

Profit r c. The approximate profit on the next table after selling 200 tables. For example the total revenue raised by selling 2 000 items priced 30 each is 2 000 x 30 60 000. Cost revenue profit examples.

Revenue is sometimes called sales sales revenue total revenue or turnover. 8 1 meaning of cost in order to understand the meaning of cost let us take the example of a farmer who is producing rice paddy. Profit from the sale of goods. Once again put x 25.

You know that it normally takes 5 to 6 months to produce rice. If the cost per item is fixed it is equal to the cost per item c times the number of items produced x or c x c x. So the revenue is the amount you sell the tables for multiplied by how many tables. Solving problems involving cost revenue profit the cost function c x is the total cost of making x items.

3 the profit a business makes is equal to the revenue it takes in minus what it spends as costs. Find the manufacturer s weekly fixed costs and marginal cost per case of soda. The total profit from selling 25 tables is 300. Cost revenue profit examples.