Total Revenue Formula

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Total revenue is the total amount earned by a certain source for selling a product at a certain price. The formula to calculate the total revenue gained by a source is, total revenue is equal to the product of the quantity of the goods and the price at which the goods are sold. The total revenue formula is very helpful when required to calculate the amount gained by a particular source such as an organization, a store etc. when a certain number of goods are sold. 

Example 1: A book store sells 55 books at a cost of $20 each book. How much is the total revenue earned by the bookstore for selling those books?

Total revenue, TR = (Quantity of the goods) * (Selling price of the goods)

In the above example, the goods are the books.

Quantity of books sold = 55.

Cost of each book = $20.

Therefore, applying the above formula we get:

Total revenue, TR = 55 * $20 = $1100.

Hence the total revenue earned by the bookstore = $1100.

Example 2: If a candy store sold 30 chocolate candies of $1.00 each and 20 strawberry candies, $0.50 each, then how much is the total revenue earned by the store?

Total revenue, TR = (Quantity of the goods) * (Selling price of the goods)

Quantity of chocolate candies sold= 30

Cost of each chocolate candy= $1.00

Revenue earned= 30* $1 = $30.00

Quantity of strawberry candies sold= 20

Cost of each strawberry candy= $0.50.

Revenue earned= 20* $0.50= $10.00

Hence total revenue earned, TR= $30.00+ $10.00= $40.00
 


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