Flashcards
Chapter 8 Key Terms
Cards in this deck (17)
- 1Breakeven PointPoint at which seller has covered all expenses and costs and has made no profit or suffered a loss.
- 2Contribution MarginDifference between selling price and variable cost.
- 3CostPrice retailers pay to manufacturer or supplier to bring merchandise into store.
- 4Dollar MarkdownOriginal selling price less the reduction to price. Markdown may be stated as a percent of the original selling price. Example: Dollar Markdown/ Original Selling Price.
- 5Dollar MarkupSelling price less cost. Difference is the amount of the markup. Markup is also expressed in percent.
- 6Fixed CostCosts that do not change with increase or decrease in sales.
- 7Gross ProfitDifference between cost of bringing goods into the store and selling price of the goods.
- 8MarginDifference between cost of bringing goods into store and selling price of goods.
- 9MarkdownsReductions from the original selling price caused by seasonal changes, special promotions, and so on.
- 10MarkupAmount retailers add to cost of goods to cover operating expenses and to make a profit.
- 11Net Profit (Net Income)Gross profit- operating expenses
- 12Operating Expenses (overhead)Regular expenses of doing business. These are not costs.
- 13Percent Markup on CostDollar markup divided by the cost; thus, markup is a percent of the cost.
- 14Percent Markup on Selling PriceDollar markup divided by the selling price; thus, markup is a percent of the selling price.
- 15PerishablesGoods or services with a limited life.
- 16Selling PriceCost plus markup equals selling price.
- 17Variable CostCosts that do change in response to change in volume of sales.