The Difference Between the Cost and the Initial Retail Price

question 57

Multiple Choice

The difference between the cost and the initial retail price of merchandise is

• A) markup.
• B) markon.
• C) markdown.
• D) market price.

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Definitions:

Volume Of Activity

A measure of the total amount of work performed or output produced in a specific period.

Margin Of Safety

Margin of safety is the difference between actual or projected sales and the sales level at which the business breaks even.

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, indicating how much contributes to covering fixed costs and generating profit.

Pretax Income

Earnings of a company before any tax is applied, calculated by deducting all operating expenses, including cost of goods sold and interest, from revenues.