What Is Revenue Minus Cost

Profit r c.

What is revenue minus cost. In symbols π r c p q f v q will be π r c 1 2 q 40 000. This means differentiate the cost revenue or profit. Profit income cost. Profit function p x total income minus total cost.

As a result this figure covers the cost of producing merchandise and can range from materials to labor. Gross profit is revenue minus the cost of goods sold. Since profit is the difference between revenue and cost the profit functions the revenue function minus the cost function. For instance say you pay 8 000 for goods and sell them for 10 000.

In finance a company s gross margin is simply the difference between revenue and cost of goods sold cogs divided by that revenue figure. The revenue sales revenue is the sum of all cash inflows made by the company s operations while the profit is the total revenues minus total costs made by the company. Gross profit represents your total revenue minus the cost of goods sold. Profit is the bottom line or net income after accounting for all expenses.

Cost function c x total cost of producing the units. Revenue is the total amount of income generated by a company. P x r x c x marginal is rate of change of cost revenue or profit with the respect to the number of units. Note we are measuring economic cost not accounting cost.

Profit 0 50 x 50 00 0 10 x 0 40 x 50 00. Unlike gross profits which are expressed as absolute. The total revenue total cost perspective is based on the fact that profit equals revenue minus cost and focuses on maximizing this difference. For our simple lemonade stand the profit function would be.