Number of flashcards in this category: 16.
1.	break-even volume		The number of units required to break even. BEV = fixed costs/ unit contribution. Useful in deciding new investments. It'll take up x units in order to break even of the fixed costs it takes to make them.
2.	retail price		What the consumer pays.
3.	customer lifetime value		value of the entire stream of purchases that a customer would make over their lifetime. CLV = [unit contr * units purchased a year for 1 customer]* years as customer - variable costs already accounted for; this is purely profit
4.	market share		market share = our sales/ total market sales. Can be in volume (# of units), or value (% of dollar sales).
5.	% premium		Also the "percent markup." % premium = (sale price/ variable cost)-1 E.g. We're selling the product at 125% of the cost to make. We've marked up by 25%.
6.	customer retention cost		cost of retaining one loyal customer (loyalty programs, discounts)
7.	% margin		The margin is 1-(var. cost/price per unit). E.g. The variable cost of us to make one is 40% of the final selling price. Our margin is 60%. (Of the final selling price, 60% of it is our profit.)
8.	cannibalization		introduction of a new product that steals market share or profit from OWN firm's existing product, rather than a competitor's
9.	sunk costs		Unrecoverable past expenditures. Ex: R&D, already spent. Shouldn't be factored into the decision, since there is no way to get it back.
10.	depreciation		accounting for a large fixed cost over time. divide total cost by the number of years it should be depreciated across.
11.	opportunity cost		Value of the next best choice that you're giving up. Doing this "cost" me x dollars, which was the value of the next best opportunity. DON'T include opportunity costs when assessing profitability, unless it's certain you would have gained it.
12.	profit impact		profit impact = (unit cont. * # of units sold) - fixed costs Essentially, how much we made from selling units (after var. costs removed), minus the extra fixed costs.
13.	fixed cost		A cost that doesn't vary by the number of units being produced. Ex: cost of machinery, fixed labor costs, advertising.
14.	variable costs		Costs that vary directly with the number of units being produced. Ex: materials, sometimes labor if by unit.
15.	unit contribution		actual amount you're making on one unit. REVENUE-VARIABLE COST. (e.g. sell for $6, cost us $4, unit cont = $2)
16.	customer acquisition costs		cost of acquiring one customer (through direct mail, samples, discounts)