Entrepreneurship II: Objective 2.03 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.

• Breakeven Point

• Operating Expenses

• Total Cost

• Price-Based Costing

A product’s price minus all associated variable costs, resulting in the incremental profit earned for each unit sold.

• Breakeven Point

• Gross Profit

• Contribution Margin

• Revenue

The amount of money a business has paid for the goods it has sold.

• Return on Investment (ROI)

• Revenue

• Sales Commission

• Cost of Goods Sold

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

• Cost-Based Pricing

• Price-Based Costing

• Price Markup

• Contribution Margin

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

• Total Cost

• Fixed Costs

• Variable Costs

• Startup Costs

A company’s net sales revenue minus its cost of goods sold (COGS).

• Gross Margin

• Gross Profit

• Profit

• Revenue

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

• Gross Margin

• Gross Profit

• Profit

• Breakeven Point

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

• Operating Costs

• Total Cost

• Fixed Costs

• Variable Costs

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

• Price Markup

• Profit

• Breakeven Point

• Return on Investment (ROI)

A pricing method in which the business determines how much customers will pay for a product, then adjusts costs accordingly.

• Cost-Based Pricing

• Price Markup

• Sales Commission

• Price-Based Costing