After gross profit is calculated, operating expenses are deducted to determine
A)gross margin.
B)profit (loss) before income tax.
C)cost of goods sold.
D)profit margin.

Question

Quizplus · Accepted Answer

Operating expenses are deducted from gross profit to determine profit (loss) before income tax, which is also known as operating income or earnings before interest and taxes (EBIT). Gross margin is a percentage calculated by dividing gross profit by net sales. Cost of goods sold is the direct cost of producing or purchasing the products sold by a company. Profit margin is a percentage calculated by dividing net income by net sales.

After Gross Profit Is Calculated, Operating Expenses Are Deducted to Determine