Financial data for Pluck and Grow Ltd in 2018 is shown below. Total revenue £68,000. Total labour costs £26,000. Total material costs £16,000. Other costs £10,000. In 2018 Pluck and Grow Ltd made: A a loss of £52,000 B a loss of £42,000 C a profit of £16,000 D a profit of £26,000 Your answer:

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Financial data for Pluck and Grow Ltd in 2018 is shown below - OCR - GCSE Business - Question 5 - 2019 - Paper 1

Question 5

Financial data for Pluck and Grow Ltd in 2018 is shown below. Total revenue £68,000. Total labour costs £26,000. Total material costs £16,000. Other costs £10,000. ... show full transcript

Worked Solution & Example Answer:Financial data for Pluck and Grow Ltd in 2018 is shown below - OCR - GCSE Business - Question 5 - 2019 - Paper 1

Step 1

Calculate Total Costs

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Answer

Total costs consist of the sum of all costs incurred by the company. We can calculate the total costs as follows:

$\text{Total Costs} = \text{Total Labour Costs} + \text{Total Material Costs} + \text{Other Costs}$

Substituting the values:

$\text{Total Costs} = £26,000 + £16,000 + £10,000 = £52,000$

Step 2

Calculate Profit or Loss

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Profit or loss is calculated by subtracting total costs from total revenue:

$\text{Profit/Loss} = \text{Total Revenue} - \text{Total Costs}$

Now substituting the known values:

$\text{Profit/Loss} = £68,000 - £52,000 = £16,000$

Step 3

Final Answer

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Answer

Since the result is a positive value, Pluck and Grow Ltd made a profit of £16,000, therefore the correct option is:

C a profit of £16,000

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