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Calculate Premium Motors’ revenue for this booking. - AQA - GCSE Business - Question 2 - 2022 - Paper 1
Question 2
Calculate Premium Motors’ revenue for this booking.
Worked Solution & Example Answer:Calculate Premium Motors’ revenue for this booking. - AQA - GCSE Business - Question 2 - 2022 - Paper 1
Step 1
Method 1: Total Driver VC and Total Petrol VC Calculation
Answer
To calculate the total revenue for the booking, we need to start by determining the variable costs (VC) associated with driving the car and petrol for the journey.
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Calculate the total driver variable cost (VC):
- Driver VC per car = £50
- Number of cars = 4
- Total Driver VC = £50 x 4 = £200
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Calculate the total petrol variable cost:
- Petrol VC per car = £20
- Number of cars = 4
- Total Petrol VC = £20 x 4 = £80
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Calculate total costs:
- Total costs = Total Driver VC + Total Petrol VC = £200 + £80 = £280
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Calculate total profit:
- Pricing for service = £50 per car
- Total revenue (after costs) = Number of cars x Price per car - Total Costs
- Total revenue = 4 x £50 - £280 = £200
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Therefore, Revenue calculation gives:
- Revenue = £200 + Total Costs = £200 + £480
- Total Revenue = £680
Step 2
Method 2: Variable Cost Calculation
Answer
For the second method:
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The variable cost per car is calculated as follows:
- Variable cost per car = Driver VC (£50) + Petrol VC (£20) = £70.
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Calculate total variable costs for 4 cars:
- Total Variable Cost = £70 x 4 = £280.
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Total costs are calculated:
- Total Costs = £280 (Variable) + £200 (Fixed costs) = £480.
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To find the total profit:
- Profit = 4 x £50 (price per car) - Total Costs = £200.
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The overall revenue calculation becomes:
- Revenue = £480 + Total Fixed Costs = £680.