Positive operating income will result if gross margin exceeds
A)operating expenses.
B)purchases.
C)cost of goods sold.
D)cost of goods sold minus operating expenses.

Question

Quizplus · Accepted Answer

Operating income is calculated by subtracting operating expenses from revenue. If gross margin (revenue minus cost of goods sold) is greater than operating expenses, then the result will be a positive operating income. Therefore, choice A is the correct answer.

Positive Operating Income Will Result If Gross Margin Exceeds