Total Revenue
Total revenue is the selling price multiplied by the number of units sold.
Formula
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Example
$25 each × 400 units: TR = $10,000
How it works
Total revenue is the amount of money a seller brings in before subtracting any costs. It is found by multiplying the price charged for one item by how many items were sold, because each unit contributes the same amount to the total. If either the price or the quantity changes, the revenue changes proportionally.
When to use it
Use this formula when you need the gross sales from selling identical items, such as in retail, ticket sales, or basic business sales problems. It is especially useful for estimating income before expenses, discounts, or taxes are taken into account.
Worked example, step by step
A bookstore sells notebooks for $8 each. It sells 150 notebooks. TR = P × Q TR = 8 × 150 TR = 1,200 Total revenue = $1,200
Common mistakes to avoid
- Using profit instead of total revenue
- Forgetting to multiply by the number of units sold
- Mixing up price per unit with total sales price
Did You Know?
Total revenue is the top line of the income statement — profit is what remains after costs are subtracted.
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BasicNet revenue is gross revenue less returns, refunds and discounts — the amount actually recognised.
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BasicAverage revenue is total revenue divided by units sold — equal to price per unit in a single-price market.
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IntermediateMarginal revenue is the extra revenue earned from selling one additional unit.
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