I have been asked to define what revenue is and how businesses can generate revenue.Delight Lollies can generate revenue in many ways.

Delight Lollies can generate revenue in many ways. One way in which they can do this is by increasing the number of sales. They can do this by the word of mouth so encouraging their customers to tell their friends about their business so more people will come to their shop. Another way they can increase revenue is making their customers happy and offering them discounts such as buy 2 for the price of one.

A. If they sell 10 boxes of ice lollies a day at 50p each lolly:

25 ice lollies per box 10 boxes are sold at 50p each lolly

25x 10=250 (how many sold)

250x50=12500p

They will earn £125 per day

B. If they sell 15 boxes of ice lollies a day at 50p each lolly

25x15=375 (how many sold)

375x50=18750p

£187.50 per day

C. 25 boxes sold a day for 75p for each lolly

25x25=625 (how many lollies sold)

625x75=46875p

£468.75 per day

Now I have been asked to work out how much money delight lollies make every week in terms of scenario A and B above.

A. If they sell 10 boxes of ice lollies a day at 50p each lolly:

25 ice lollies per box 10 boxes are sold at 50p each lolly

25x 10=250 (how many sold)

250x50=12500p

They will earn £125 per day x 5 = £625 (per week)

B. If they sell 15 boxes of ice lollies a day at 50p each lolly

25x15=375 (how many sold)

375x50=18750p

£187.50 per day x 5 = £937.50 (per week)

Task 4

In task 4 I have been asked to explain what is meant by profit and also distinguish what is meant by gross and net profit.

When revenue of a business is greater than its costs over a period of time this is called profit. When businesses generate a large enough profit they could put this money they gain towards the business and make it more successful. For example the money gained could be put in to buying new equipment; this equipment could help develop a product better than it was before.

When expense has been deducted from gross profit, the money left over is Net Profit. Expenses may include rent, bills, and wages, insurance but NOT STOCK. Gross Profit - Expenses= Net Profit.

A. If they sell 10 boxes of ice lollies a day at 50p each lolly:

25 ice lollies per box 10 boxes are sold at 50p each lolly

25x 10=250 (how many sold)

250x50=12500p

They will earn £125 per day x 5 = £625 (per week)

£625= Gross Profit

Expenses= Fixed + Variable

£124.00(weekly) +£55(daily)

£124.00 + £275 = £399

£625- £399 = £226= Net Profit

B. If they sell 15 boxes of ice lollies a day at 50p each lolly

25x15=375 (how many sold)

375x50=18750p

£187.50 per day x 5 = £937.50 (per week)

£937 = Gross Profit

£124(weekly) + £82.50 (daily)

£124 + 412.50 = £536.50

£937.50 - £536.50 = £401= Net Profit

The importance of costs, profit and revenue are important to delight lollies. The reason why they are important is because the amount of money coming in which is the revenue minus the costs gives you the profit. Revenue is important to them because then they can see how many lollies they have sold over a certain period of time, the more sales that they make the more revenue they are making. If they are gaining more sales then they know they are doing well in the business, but if they do much worse in the next week then they can figure out what went wrong and why they aren't producing as much sales. Also profit is important to delight lollies because the money that they gain could be invested into the business, they could do many things such as expanding the business.