Sales, Revenue and Costs

• Sales figures can be measured in terms of sales volume or sales revenue.
• Sales volume is more relevant for businesses that manufacture and sell physical products.
• Sales revenue is more relevant for businesses that sell services or intangible products.
• Costs of production can be categorized as fixed costs or variable costs.
• Fixed costs do not vary directly with output, while variable costs do.

This module discusses the fundamental concepts of sales, revenue, and costs of production. Businesses can measure sales figures by looking at sales volume or sales revenue, depending on the nature of the business. For example, a car manufacturer may focus on sales volume, while a supermarket would consider sales revenue. Sales revenue can be calculated by multiplying the selling price by the quantity sold. On the other hand, costs of production can be categorized as fixed costs or variable costs. Fixed costs, such as rent and utilities, do not vary directly with output, while variable costs, like raw materials, do. Total cost is the sum of fixed costs and variable costs. The video provides an exercise of categorizing costs for a coffee shop and demonstrates how to fill out a table with fixed and variable costs at different levels of output. The main message is to understand the distinction between sales volume and sales revenue, as well as fixed and variable costs, in order to calculate total cost accurately.