Flashcards
Key Terms Chapter 8 Markups and Markdowns: Perishables and Breakeven Analysis
Cards in this deck (17)
- 1Breakeven PointThe point at which the seller has covered all expenses and cost of a unit and has not made any profit or suffered any loss. Every unit sold after the Breakeven Point will bring some profit/loss
- 2Contribution MarginThe difference between selling price (S) and variable cost (VC) The difference goes 1st to pay off total fixed cost (FC); when they are covered, profit/losses start to accumulate
- 3CostThe price retailers pay to a manufacturer/supplier to bring the goods into the store
- 4Dollar Markdownoriginal selling price-new selling price
- 5Dollar Markupselling price - cost
- 6Fixed CostCosts that don't change with increase or decrease in sales, they include payments for insurance, business license, rent, lease, utilities, labor, and so on
- 7Gross ProfitThe difference between the cost of brining the goods into the store and the selling price
- 8MarginThe difference between the cost of brining the goods into the store and the selling price
- 9MarkdownsReductions from the original selling price caused by seasonal changes, special promotions, style change, etc.
- 10MarkupThe difference between the cost of brining the goods into the store and the selling price
- 11Net Profit (Net Income)The amount remaining after subtracting the cost of goods and the operating expenses from the sale of the goods
- 12Operating Expense (Overhead)The regular expenses of doing business, such as rent, wages, utility, insurance, and advertising
- 13Percent Markup on CostDollar markup divided by the cost; thus, markup is a percent of the cost
- 14Percent Markup on Selling Pricedollar markup/ selling price
- 15PerishablesGoods or services with a limited life
- 16Selling PriceThe price retailers charge consumers
- 17Variable Costcosts that do change in response to the change in the volume of sales; include: payments for materials, some labor, etc.
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- Key Terms for Chapter 8 Markups and Markdowns: Perishables and Breakeven Analysis
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- Kyra Louthan
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