Entrepreneurship II: Objective 2.02 Vocabulary Test

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

• Gross Profit

• Breakeven Point

• Economies of Scale

• Capital Expenditure

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

• Capital Expenditure

• Depreciation

• Sales Commission

• Price-Based Costing

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

• Price Markup

• Mixed Costs

• Price-Based Costing

• Cost-Based Pricing

Loss of value.

• Capital Expenditure

• Price Markup

• Economies of Scale

• Depreciation

Cost savings created by increased levels of production.

• Economies of Scale

• Price Markup

• Price-Based Costing

• Cost-Based Pricing

Operating costs that do not increase or decrease with changes in production.

• Operating Costs

• Fixed Costs

• Variable Costs

• Total Cost

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

• Breakeven Point

• Sales Commission

• Total Cost

• Gross Profit

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

• Total Cost

• Cost-Based Pricing

• Mixed Costs

• Price-Based Pricing

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

• Operating Costs

• Fixed Costs

• Variable Costs

• Mixed Costs

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

• Price Markup

• Gross Profit

• Sales Commission

• Mixed Costs