Entrepreneurship Chapter 26

Vocab: What a customer actually buys from you.

The economics of one unit is calculated by which method?

Vocab: Discount for buying greater quantities.

Vocab: Expense that changes based on the amount of product or service a business sells.

Vocab: Cost reduction made possible by spreading costs over a larger volume.

The supplies used to provide a service are a variable expense.

Every sale has related expenses.

Vocab: A business design that ensures the business will be profitable with each sale after expenses.

Vocab: Amount per unit that products contribute toward the company's profitability before fixed expenses are subtracted.

The unit of sale for a shoe retailer is __________.

Sales commissions and packaging expenses are variable expenses.

Vocab: Variable expense associated with each unit of sale, including cost of materials and labor to make the product.

Vocab: Fixed amount of money that an employee is paid on a regular basis.

The purpose of EOU is to determine the amount of profit a business makes every time it __________.

A unit of sale is the largest unit that the customer can actually buy.

Labor costs are included in the EOU calculation for a manufacturer.

A typical EOU for a line of similar products could be calculated based on the average __________ of the products.

A unit of sale for a wholesaler could be a carton containing many items.

Vocab: Things you will have to buy to keep the business running.

Vocab: Variable expense associated with each unit of sale, including cost of materials and labor to provide the service.

The contribution margin is the amount a product contributes toward a company's profit before __________ are subtracted.

Labor costs are included in the EOU calculation for a wholesaler.

The cost of __________ and __________ used to make a product are variable expenses.

The contribution margin considers variable and fixed expenses.

Typically in business the cost per unit __________ as you buy larger amounts.

Vocab: The amount of money being paid for someone's time, usually in the form of full-time or part-time employees.

Vocab: Amount paid based on the volume of products or services that a salesperson sells.

A business can only make profit if all of the expenses are __________ the selling price for the product or service.

Expenses that vary with the amount of product sold are called __________.

Labor costs are included in the EOU calculation for a retailer.

Most salespeople are paid by what? (2 correct answers)

Volume discount means you pay less per item when you buy less items.