Cost of revenue

Cost of revenue is the amount of money the business has to shell out in order to create their total revenue. For instance you found an unattended cassette player and sold it to whoever still wants one these days and received $10 from the sale. Your total revenue is $10, and the cost of revenue is 0 since you just found it lying somewhere and sold it, which didn't cost you anything to generate that $10, it's a freebie. In a real business, companies spend to produce their own products, the total cost to create the quantity of all their products is the cost of revenue. For example, the company produced 10 cars and it costs $100,000 to make. When all the cars were sold, they generated a revenue of $150,000. Therefore, the cost of a $150,000 revenue is $100,000.

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