Calculating total revenue

A unit is a single item or service that is sold. The selling price per unit is the amount charged to the customer for one unit, such as one drink, one ticket or one hour of a service. It is the price you charge, not what the unit costs you to provide.

Total revenue from sales is the money received from selling units. You calculate it by multiplying the selling price per unit by the number of units sold. The formula is:

total revenue = selling price per unit × quantity sold

Multiplying works because every unit sold at the same price brings in that amount. If a community cinema sells 140 tickets at £6 each, the total revenue is 140 × £6 = £840. The 140 is the quantity sold and £6 is the selling price per unit.

Check that both figures describe the same unit. If the selling price is for one drink, multiply it by the number of drinks sold, not by the number of customers.