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Overhead/Operating
Mrs. Dudley 4.04
| 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 |
| Economics of scale | Cost savings created by increased levels of production |
| Fixed costs | Business cots 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 of production, then becomes 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 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-variable |
| 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:
Zannah.h449
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