Business
Basics
Manufacture and sell a
product (item).
A whole number (q) of items, no
fractions.
Definitions
Costs: money we pay to produce
our product.
Revenue: money customers pay us
to purchase our product.
Profit: Money that remains from
revenue after costs are paid:
Profit formula: P = R – C.
Cost
Fixed Costs: The same total cost, no
matter how many items.
Variable Costs: The total cost depends
on how many items.
C = FC + VC