Merchandising 3.2
Value progression
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Fixed Expenses
A cost that, for a given period of time and range of activity called the relevant range, does not change in total but becomes progressively smaller on a per unit basis as volume increases; these expenses do not increase with increased business, nor do they decrease with declining business activity.
Variable Expenses
A cost which is uniform per unit, but fluctuates in direct proportion to change in the related total activity or volume.
Quartile
A division of the total into four intervals, each one representing one-fourth of the total.
Functional pricing
A method of price quotation by which the charges are broken down into several major component parts, such as professional service, facilities, automobile, and merchandise.
Bi-unit pricing
A method of price quotation showing separately the price of the service to be rendered and the price of the casket.
Unit pricing
A method of price quotation which creates one total price package for both service and merchandise.
Consumerized pricing
A method of pricing so that actual price figures are familiar to the consumer
Price determination
A method used by management to establish the selling price for services and merchandise.
Fixed dollar
A price determination method whereby the amount of profit desired on each casket sale is added to the wholesale cost of each casket.
Fixed multiple
A price determination method whereby the casket cost is multiplied by a constant factor; aka straight line, balance line, times factor.
Graduated recovery
A pricing method where the mark-up varies.
Package pricing
A pricing method which groups together selected services and/or merchandise.
Markdown
A reduction of selling price below the original selling price.
Benchmark
A standard point of reference to which all other offerings may be compared; the most- and least-expensive caskets serve as _____on the selection room floor.
Median
A value in an ordered set of values which represents the midpoint, whereby there are an equal number of values above and below the midpoint value.
Equal Credit Opportunity Act
An act which guarantees equal credit opportunity to all applicants for credit and prohibits credit discrimination on the basis of race, color, religion, national origin, age, marital status, or because all or part of a person's income derives from any public assistance program.
Consumer Credit Protection Act
An act which requires a seller to disclose terms of sale and give facts of actual interest rate and other charges.
Fair Credit Reporting Act
An act which requires creditors to notify a potential recpient of credit whenever any adverse action or denial of credit was based on a credit report.
Truth in Lending Act
An act which requires lenders to inform borrowers of all direct, indirect and true costs of credit.
Credit
An agreement that payment for a product or service will be made at some later date.
Overhead
Any cost not specifically associated with production of identifiable products and services.
Factoring
Obtaining cash before payments are received from customers by selling off one's accounts receivable to a third party.
Markup
The difference between merchandise cost and selling price, i.e., gross margin.
Consumerism
The emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised; also, a social movement that seeks to strengthen the rights of consumers relative to sellers.
Wholesale price
The list price the funeral home normally pays for the casket from the manufacturer; this is the price that is used to figure the retail price (i.e. through one of the various pricing strategies.)
Price quotation
The method by which prices are explained to the consumer (e.g. itemized GPL required by FTC but package pricing allowed.)
Itemization
The method of price quotation by which each unit of service and/or merchandise is priced separately.
Sales frequency
The number of times sales in a given price bracket occurs over a fixed period of time.
Mode
The number that occurs most frequently in a listing of numbers.
Consumer Value Index (CVI)
The percentage derived by dividing the wholesale cost of the merchandise by the retail price of the merchandise.
Break-even analysis (aka Break-even point)
The point at which total sales revenue equals total costs; determined by formula or chart; aka Break-even point
Merchandise Value Ratio (MVR)
The relationship between the wholesale cost of the merchandise and the total cost (both services and merchandise) to the consumer.
Mean (Average)
The sum of a group of numbers divided by the number of units.
Range
The upper and lower limits of a series of numbers.
