Sales volume – The total number of goods/services that are sold by a business
Sales revenue – The total amount of money earned from the sale of goods/services
Fixed costs – Costs that do not change with the level of business output e.g. rent and salaries
Variable costs – Costs that change with the level of business output e.g. Wages and raw materials
A) Calculation of sales volume and sales revenue
Sales revenue = Price x Quantity
| Selling price | Sales volume | Sales revenue |
| £5.50 | 40,000 | £220,000 |
| 30p | 125,000 | £37,500 |
| £2.00 | 80,000 | £160,000 |
Sales volume = Sales revenue/Selling price
| Sales revenue | Sales price | Sales volume |
| £125,000 | 50p | 250,000 |
| £100,000 | £1.00 | 100,000 |
| £115,000 | £4.00 | 28,750 |
B) Calculation of fixed and variable costs
Average variable cost = £6
Total variable costs = Average variable cost x Output (£6,000)