When nonmanufacturing costs are subtracted from gross margin, the result is called:
A) cost of goods sold.
B) net operating income.
C) sales.
D) nonmanufacturing income.

Question

Quizplus · Accepted Answer

Nonmanufacturing costs are expenses related to selling, general, and administrative expenses. When these costs are subtracted from gross margin, the resulting figure is net operating income. Therefore, the correct answer is B) net operating income.

When Nonmanufacturing Costs Are Subtracted from Gross Margin, the Result