COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Last year, a business made £300, 000 profit from sales revenue of £750, 000. Its total variable costs equalled £125, 000. The value of the business’s fixed costs was:
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£175, 000
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£325, 000
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£450, 000
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£625, 000
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Explanation:
Detailed explanation-1: -Net profit is gross profit minus operating expenses and taxes. You can also think of it as total income minus all expenses.
Detailed explanation-2: -If the rate of gross profit is ‘25%‘ of sales and Cost of Goods sold is Rs. 1, 00, 000, the amount of gorss profit will be. Rs. 25, 000.Rs.
Detailed explanation-3: -Breakeven sales volume is the amount of your product that you will need to produce and sell to cover total costs of production.
Detailed explanation-4: -Finding profit is simple using this formula: Total Revenue-Total Expenses = Profit.
There is 1 question to complete.