Transactions - JSS2 Business studies Lesson Note

Cost of Sale:

The cost of sale encompasses all expenses incurred in the process of selling a product or service, including production costs, marketing expenses, distribution fees, and transaction fees. It's essential for businesses to accurately calculate the cost of sale to determine profitability and set appropriate pricing strategies.

 

Mark-up:

Mark-up refers to the difference between the cost of acquiring a product or service and its selling price. It represents the margin that businesses add to cover expenses and generate profit. Mark-up percentages vary depending on factors such as industry norms, competition, and market demand.

 

Turnover:

Turnover, also known as sales turnover or revenue, measures the total value of goods or services sold within a specific period. It reflects the efficiency of a business in generating sales and is a key indicator of its financial performance. Higher turnover generally indicates greater business activity and potential for profit.

 

Profit and Loss:

Profit is the financial gain obtained from subtracting the total expenses from the total revenue generated through sales. It represents the surplus earned by a business after covering all costs. In contrast, a loss occurs when expenses exceed revenue, resulting in a negative financial outcome. Analyzing profit and loss enables businesses to assess their profitability and make informed decisions to improve financial performance.