What Is Revenue,

Total Revenue
And Total Cost
Approach ?

PRESENTED BY : KATHLEEN R. BALDEMOR

SUBMITTED TO : SIR ALLAN A. ROQUE
OVERVIEW
• Definition of
Revenue
• Total Revenue
Approach (TR)
• Formula of TR
• Total Cost
Approach (TC)
• Formula of TC
• Table
 TOTAL REVENUE APPROACH
FORMULA

TR = P X Q
Where : P = PRICE
Q = QUANTITY SOLD
REVENUE
➢ Revenue refers to all the money a
Firm/producer takes in from doing what it
does – whether making goods or providing
services.

➢ Revenue is also the total inflow of money

received by a company from its normal
business activities. Such as sales of goods
and services, rental income, and other source
of income.
 TOTAL REVENUE APPROACH
(TR)

➢ According to (McConnell.,
2011) it is the income made
from the sales of a given
product.

➢ This total does not take or

include the cost of producing
the product.
TOTAL COST APPROACH

• The sum of all costs

incurred by a firm in
producing a certain
level of output.
• It consists of total
fixed costs and total
variable costs.
VARIABLE COST & FIXED COST

• Variable cost -is that

cost which changes as
the level of output
changes.
• Fixed Cost - is a cost
that does not change
with the quantity
produced.
TOTAL COST FORMULA

TC = TFC + TVC
Where :
TC = TOTAL COST
TFC = TOTAL FIXED COST
TVC = TOTAL VARIABLE COST
OUTPUT TOTAL VARIABLE TOTAL COST
TOTAL FIXED COST COST ( TC = TFC + TVC )

40 --- 40
0

1 40 6 46

2 40 11 51

3 40 15 55

4 40 20 60
THANK YOU !!!