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Explain the concept of advertising revenue as a source of income.
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Advertising revenue is income generated from selling advertising space, such as online ads on platforms like Telegram.
What is the role of subscriptions in generating revenue?
Subscriptions provide a recurring income stream from customers who regularly pay for ongoing services like streaming platforms (e.g., Apple Music).
Define variable costs and provide an example.
Variable costs change directly with the level of output, such as the cost of raw materials increasing as more product is produced.
Differentiate between direct and indirect costs with examples.
Direct costs can be traced directly to a specific product (e.g., cost of wood for a specific furniture piece), whereas indirect costs cannot be directly traced and are often organization-wide expenses (e.g., company-wide internet fees).
Explain why all costs are categorized into fixed/variable and direct/indirect.
This dual categorization helps in cost analysis by identifying how costs behave relative to production and how they can be attributed to specific products or processes.
Identify and explain two alternative revenue streams outside product sales.
Two alternative revenue streams could be dividends from investments in other companies and rental income from leasing company-owned property.
What is the definition of fixed costs?
Fixed costs are expenses that do not change with the level of output produced, like rent or salaried labor.
What factors should be analyzed when categorizing a cost as direct or indirect?
Factors include whether the cost can be directly attributed to a specific product or project and if it serves the overall organization without specific ties to product production.
Why might donations be a significant revenue stream for some organizations?
Donations are crucial for non-profits or individual creators who rely on external funding as a major or supplementary source of revenue.
Define royalties and give an example of how they generate revenue.
Royalties are earnings from allowing others to use intellectual property or franchise rights, such as payments authors receive from book sales.
What distinguishes revenue from profit?
Revenue is the total income received from sales, while profit is revenue minus the costs incurred in generating that revenue.
Give an example of how a fixed cost might change without altering production levels.
A fixed cost might change due to an external factor like an increase in internet service fees unrelated to production output.
Calculate total revenue given a price per unit of $50 and quantity sold of 200 units.
Total revenue is calculated as price x quantity sold, so $50 x 200 = $10,000.
Describe interest as a revenue stream and how it might be earned.
Interest income is earned by depositing funds in investment accounts or savings accounts, which accrue interest over time.
How can sponsorship deals contribute to revenue streams?
Sponsorship deals provide revenue in the form of payments from companies to advertise their brands, for example, by placing logos on sports team uniforms.
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