Which of the following is a correct definition of operating income?
A) Sales minus variable expenses.
B) Sales minus variable expenses and traceable fixed expenses.
C) Contribution margin minus traceable and common fixed expenses.
D) Income before interest and taxes (EBIT).

Question

Quizplus · Accepted Answer

Operating income, also known as earnings before interest and taxes (EBIT), is the income generated from a company's core business operations before deducting interest expenses and income taxes. Therefore, option D is the correct definition of operating income.

Which of the Following Is a Correct Definition of Operating