Which of the Following Is Not Subtracted to Arrive at Operating

question 1

Multiple Choice

Which of the following is not subtracted to arrive at operating income?

• A) interest expense.
• B) cost of goods sold.
• C) amortization.
• D) selling and administration expense.

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Definitions:

Incremental Manufacturing Cost

The additional costs incurred to produce an extra unit of output, including additional materials, labor, and overhead expenses.

Relevant Range

The scope of operations where the premises regarding variable and fixed cost dynamics hold true.

Manufacturing Overhead Cost

Expenses related to the manufacturing process that are not directly attributable to individual products, such as utility costs, depreciation, and maintenance of equipment.

Produced Units

The quantity of items manufactured during a specific period.