View
216
Download
1
Category
Tags:
Preview:
Citation preview
INTRODUCTION TO PROFIT
Part 11
Starter
What is the “cost of sales”?
What is Profit?
Lesson Objective
To be able to define the cost of sales.
To be able to define and calculate gross profit from a formula.
Activity 1
£3 + £2 = £5
(£3 x 15) + (£2 x 15) = £45 + £30 = £75
Activity 2
£1 + £2 + £1.50 + £5.50 + £5 = £15
(£1 x 5) + (£2 x 5) + (£1.50 x 5) + (£5.50 x 5) + (£5 x 5) = £5 + £10 + £7.50 + £27.50 + £25 = £75
L/O: Calculate cost of sales
Gross Profit
Revenue – Cost of Sales = Gross Profit
The money made from selling a product (the revenue), AFTER the cost of producing the product (the cost of sales) has been deducted.
E.g. It costs me £10 to make a table and I sell it for £16. Therefore, my Gross Profit is £6.
Activity 3
Revenue = £200
Cost of Sales = £100
Gross profit = £200 - £100 = £100
L/O: Calculate Gross Profit
Activity 4
10 x £25 = £250 = revenue10 x £15 = £150 = cost of sales£250 - £150 = £100 = gross profit
17 x £25 = £425 = revenue17 x £15 = £255 = cost of sales£425 - £255 = £170 = gross profit
L/O: Calculate Gross Profit
Activity 5 L/O: Identify cost of sales
Activity 6
1. (£2 x 2) + £0.50 + £0.50 + £4 = £9
2. £9 x 15 = £135 = cost of sales
3. Revenue = 15 x £16 = £240Gross Profit = £240 - £135 = £105
L/O: Calculate Gross Profit
Recap
Recommended