Lesson: Revenue, Cost, and Profit (Simple)

When a business sells something, money comes in and money goes out.

1) Revenue (Money In)

Revenue is the total money a business earns from selling products or services.
Example: If you sell 10 burgers for ₱120 each:
Revenue = 10 × ₱120 = ₱1,200

2) Cost (Money Out)

Cost is the money the business spends to make and sell the product.
Examples: ingredients, packaging, rent, wages, electricity, delivery.

Example: If making 10 burgers costs ₱65 each:
Cost = 10 × ₱65 = ₱650

3) Profit (What’s Left Over)

Profit is what remains after paying costs.

✅ Profit = Revenue − Cost
✅ Profit = Money in − Money out

Example:
Revenue = ₱1,200
Cost = ₱650
Profit = ₱1,200 − ₱650 = ₱550

If profit is positive, the business earned money.
If profit is negative, the business lost money (that’s a loss).

ESSAY QUESTIONS

In your own words, what is revenue?
Give two examples of business costs.
A shop sells 12 drinks for ₱50 each. What is the revenue?
The total cost to make those drinks is ₱420. What is the profit?
Why is it possible for a business to have high revenue but low profit? (Give 1 reason.)

Revenue, cost, profit (simple: profit = money in − money out)