Revenue, costs and profit for GCSE Business
GCSE Business, Finance. Usually met in years 9 to 11.
Calculate revenue, total costs and profit or loss, and the cost of borrowing with interest.
What you practise
- Revenue = price × quantity
- Fixed, variable and total costs
- Profit, loss and interest on loans
Starts with revenue and builds to losses and loan repayments. Practice moves up a level when a round goes well and down when it does not.
Sample questions
Each sample comes with the method and the reason every wrong option is wrong. Real practice rounds are ten questions at your level.
Sample question, level 2 of 5
Fixed costs are £2,300. Variable costs are £4 per item, and 390 items are made. What are the total costs?
- £2,304
- £898,560
- £740
- £3,860
- £1,560
Show the answer and method
Answer: D, £3,860
The method: Total costs = fixed costs + variable cost per item × quantity = £2,300 + £4 × 390 = £3,860.
Why the other options are wrong:
- A, £2,304: The variable cost must be multiplied by the number made.
- B, £898,560: Fixed costs are paid once, not for every item.
- C, £740: Costs are added together.
- E, £1,560: The fixed costs were left out.
Sample question, level 4 of 5
In a month, a business has revenue of £7,100 and total costs of £7,500. What is the result?
- A profit of £7,100
- A loss of £400
- A loss of £7,500
- A loss of £14,600
- A profit of £400
Show the answer and method
Answer: B, A loss of £400
The method: Profit = revenue − total costs = £7,100 − £7,500 = −£400. A negative result is a loss of £400.
Why the other options are wrong:
- A, A profit of £7,100: That is the revenue, before costs.
- C, A loss of £7,500: That is the total costs, not the difference.
- D, A loss of £14,600: Revenue and costs were added. Take one away from the other.
- E, A profit of £400: Costs are bigger than revenue, so it is a loss.
See where this fits: every GCSE option topic and Key Stage 3.
Related topics: Break-even, Cash flow, Margins and returns, Sources of finance.
