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Related Flashcards
Related Topics
Cards In This Set
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Markup
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A dollar amount added to the cost of products to get the selling price.
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Markup (percent)
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Means percentage of selling price that is added to the cost to get the selling price.
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Markup Chain
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The sequence of markups firms use at different levels in a channel - determines the price structure of the whole channel
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Stockturn Rate
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The number of times the average inventory is sold in a year.
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Average-cost Pricing
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Means adding a reasonable markup to the average cost of a product.
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Total Fixed Cost
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The sum of those costs that are fixed in total - no matter how much is produced. (rent, depreciation, managers' salaries, property taxes, and insurance)
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Total Variable Cost
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The sum of those changing expenses that are closely related to output - expenses for parts, wages, packaging materials, outgoing freight, and sales commissions.
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Total Cost
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The sum of total fixed cost and total variable cost.
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Average Cost (per unit)
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Obtained by dividing total cost by the related quantity
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Average Fixed Cost (per unit)
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Obtained by dividing total fixed cost by the related quantity.
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Average Variable Cost (per unit)
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Obtained by dividng total variable cost by the related quantity.
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Target Return Pricing
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Adding a target return to the cost of a product - has become popular in recent years.
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Break-even Analysis
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Evaluates whether the firm will be able to break even with a particular price.
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Break-even Point (BEP)
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The quantity where the firm's total cost will just equal its total revenue.
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Fixed-Cost (FC) Contribution Per Unit
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The assumed selling price per unit minus the varial cost per unit.
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