Chapter 4 Vocabulary

Front

The income generated from the sale of goods and services.

Back

revenue

Front

The amount added to the cost of a product to determine the retail price, generally covers expenses and provides a profit.

Back

markup

Front

The direct costs associated with production of a product, including the raw materials used to make it and the labor costs.

Back

cost of goods (COGS)

Front

The difference between revenue and the expenses of buying, producing, and operations.

Back

net profit

Front

Gross profit divided by revenue or the amount by which revenue from sales exceeds business costs for all items.

Back

profit margin percentage

Front

Reductions to the original selling price of items to encourage rapid sales.

Back

markdowns

Front

The amount paid by a retailer to the manufacturer or supplier for an item.

Back

item cost

Front

These overhead expenditures are incurred to generate revenue.

Back

operating expense

Front

Revenue minus COGS or the difference between revenue and cost of goods sold--the materials and labor required to produce the product.

Back

gross profit

Front

The amount a customer pays the retailer for a profit.

Back

item retail / retail price