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The following is an extract of financial information for a small gardening business - Edexcel - GCSE Business - Question 17 - 2016 - Paper 1

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The following is an extract of financial information for a small gardening business. It shows the costs, revenues and profit. Fill in the three blanks. | ... show full transcript

Worked Solution & Example Answer:The following is an extract of financial information for a small gardening business - Edexcel - GCSE Business - Question 17 - 2016 - Paper 1

Step 1

Total revenue for September

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Answer

To determine the total revenue for September, we can use the profit formula:

extProfit=extTotalRevenueextTotalCost ext{Profit} = ext{Total Revenue} - ext{Total Cost}

From the table, the profit for September is -£1 450, and the total cost is calculated by adding fixed costs and variable costs:

extTotalCostforSeptember=extFixedCosts+extVariableCosts=£1000+£5300=£6300 ext{Total Cost for September} = ext{Fixed Costs} + ext{Variable Costs} = £1 000 + £5 300 = £6 300

Substituting into the profit formula gives:

£1450=extTotalRevenue£6300-£1 450 = ext{Total Revenue} - £6 300

Solving for total revenue:

extTotalRevenue=£1450+£6300=£4850 ext{Total Revenue} = -£1 450 + £6 300 = £4 850

Step 2

Variable costs for August

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Answer

To find the variable costs for August, we can use a similar approach as above:

extTotalCost=extFixedCosts+extVariableCosts ext{Total Cost} = ext{Fixed Costs} + ext{Variable Costs}

Substituting the known values:

£5400=£1000+extVariableCosts£5 400 = £1 000 + ext{Variable Costs}

Thus, solving for variable costs gives:

extVariableCosts=£5400£1000=£4400 ext{Variable Costs} = £5 400 - £1 000 = £4 400

Step 3

Total cost for September

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Answer

We already computed the total cost for September when determining the variable cost:

extTotalCostforSeptember=£1000+£5300=£6300 ext{Total Cost for September} = £1 000 + £5 300 = £6 300

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