Revenue from multiple products

When an enterprise sells more than one product or service, work out the revenue for each product separately, then add the amounts together to find total revenue. Each product has its own selling price, so the prices only match up with their own quantities if you calculate product by product.

For example, a school enterprise sells printed tote bags at £8 each and branded water bottles at £11 each. In one month it sells 75 tote bags and 60 water bottles.

The total revenue is £1,260. Adding the units together first (135 units) would be no use, because tote bags and water bottles are sold at different prices, so one combined price would describe neither product.

Setting the working out product by product keeps each price with the right quantity, makes the final total easy to check, and shows where every part of the income came from. Calculating revenue for just one of the products and stopping there understates total revenue, because it leaves out income the enterprise actually received from its other products.