6.3

Question 1

What is profit?

Answer 1

Profit is the money gained in total revenue is greater than total cost for periods of time.

Question 2

How can a break even charge help a business?

Answer 2

Identifies sales quantity needed to make a profit at a certain price and cost. A business can use it to judge the most appropriate price and cost to profit from a market.

Question 3

What is contribution?

Answer 3

Contribution is the difference between the sale price and the cost of materials of a product.

Question 4

How is contribution calculated?

Answer 4

Price of one product - cost of material for one product = contribution