Practical Business Math Procedures - Chapter 8 Key Terms Flash Cards

Pregunta	Respuesta
Breakeven point	Point at which seller has covered all expenses and costs and has made no profit or suffered a loss.
Contribution margin	Selling price - variable cost.
Cost	Price retailers pay to manufacture or supplier to bring merchandise into store.
Dollar markdown	Selling price - reduction in price. Markdown may be stated as a percentage of the original selling price.
Dollar markup	Selling price - cost. Difference is the amount of the markup. Markup is also expressed in percentages.
Fixed cost	Cost that doesn't change with increase or decrease in sales.
Gross profit	Difference between cost of bringing goods into the store and selling price of the goods.
Margin	Difference between cost of bringing goods into store and selling price of goods.
Markdowns	Reductions from original selling price caused by seasonal changes, special promotions, and so on.
Markup	Amount retailers add to cost of goods to cover operating expenses and make a profit.
Net profit (net income)	Gross profit - operating expenses.
Operating expenses (overhead)	Regular expenses of doing business. Not directly associated with a specific department or product. These are not costs.
Percent markup on cost	Dollar markup ÷ cost.
Percent markup on selling price	Dollar markup ÷ selling price.
Perishables	Goods or services with a limited life.
Selling price	Cost + markup.
Variable cost	Cost that changes in response to change in volume of sales.

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