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4.04 overhead/op cos
| 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 in 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 expenses |
| 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 become variable; also called semi-variable 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 costs of a product and its selling price |
| sales commission | an amount a salesperson earns per sales, 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 known as mixed costs or semi-variable costs |
| semi-variable costs | expenses that are fixed until the company reaches a certain level of production, then become variable; also known as mixed costs or semi-fixed costs |
| total costs | the sum of the overhead and direct costs required |
Created by:
sasha.h595
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