If an organization wants to make a profit,it must generate more sales revenue than the total costs it incurs.This relation can be expressed using which of the following profit equations?
A)Operating income = [Sales price per unit - Variable cost per unit x # units sold] - Fixed cost
B)Operating income = [Sales price per unit - Fixed cost per unit x # units produced] - Variable cost
C)Operating income = Sales revenue - Total variable costs - Discretionary costs
D)Operating income = Sales revenue - Committed costs - Fixed costs

Question

Quizplus · Accepted Answer

The correct equation for operating income is: Operating income = [Sales price per unit - Variable cost per unit x # units sold] - Fixed cost. This equation correctly accounts for sales revenue, variable costs, and fixed costs to determine profit.

If an Organization Wants to Make a Profit,it Must Generate