The point at which a business's total sales equal its total expenses; the business has not yet made a profit but has not incurred any losses.

A one-time purchase a business makes (e.g., land, building, equipment).

A pricing method in which the business adds a predetermined markup to the total cost of making the product.

Cost savings created by increased levels of production.

Business costs that are not affected by changes in sales volume; also known as fixed expenses.

Operating costs that do not increase or decrease with changes in production; also known as fixed costs.

A company's revenue after subtracting the costs of the products it has sold.

Expenses that are fixed until the company reaches a certain level pf production, then become variable; also called semi-variable costs or semi-fixed costs.

The ongoing, day-to-day expenses of running a business that are not directly related to production.

A pricing method in which the business determines how much the customers will pay for a product, then adjusts costs accordingly.

The difference between the total cost of a product and its selling price.

An amount a salesperson earns per sale, either a percentage or a flat rate.

Expenses that are fixed until the company reaches a certain level of production, then become variable; also called mixed costs or semi-fixed costs.

The sum of the overhead and direct costs required to make a product.

Business costs that change according to changes in sales volume; also known as variable expenses.

Operating costs that fluctuate with changes in production; also known as variable costs.

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4:04 Glossary

Overhead/Operating Costs

Term	Definition
Break-even point	The point at which a business's total sales equal its total expenses; the business has not yet made a profit but has not incurred any losses.
Capital expenditure	A one-time purchase a business makes (e.g., land, building, equipment).
Cost-based pricing	A pricing method in which the business adds a predetermined markup to the total cost of making the product.
Depreciation	Loss of value.
Economies of scale	Cost savings created by increased levels of production.
Fixed costs	Business costs that are not affected by changes in sales volume; also known as fixed expenses.
Fixed expenses	Operating costs that do not increase or decrease with changes in production; also known as fixed costs.
Gross profit	A company's revenue after subtracting the costs of the products it has sold.
Mixed costs	Expenses that are fixed until the company reaches a certain level pf production, then become variable; also called semi-variable costs or semi-fixed costs.
Operating costs	The ongoing, day-to-day expenses of running a business that are not directly related to production.
Price-based costing	A pricing method in which the business determines how much the customers will pay for a product, then adjusts costs accordingly.
Price markup	The difference between the total cost of a product and its selling price.
Sales commission	An amount a salesperson earns per sale, either a percentage or a flat rate.
Semi-fixed costs	Expenses that are fixed until the company reaches a certain level of production, then become variable; also called mixed costs or semi-fixed costs.
Semi-variable costs	Expenses that are fixed until the company reaches a certain level of production, then become variable; also called mixed costs or semi-fixed costs.
Total cost	The sum of the overhead and direct costs required to make a product.
Variable costs	Business costs that change according to changes in sales volume; also known as variable expenses.
Variable expenses	Operating costs that fluctuate with changes in production; also known as variable costs.

Created by: user-1943516

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