Income from Operations Will Always Result If

question 34

Multiple Choice

Income from operations will always result if

• A) the cost of goods sold exceeds operating expenses.
• B) revenues exceed cost of goods sold.
• C) revenues exceed operating expenses.
• D) gross profit exceeds operating expenses.

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Definitions:

Work in Process

A stage in the production process that includes goods partially completed; not yet ready for sale.

Factory Overhead

Indirect costs incurred during the manufacturing process, such as utilities, maintenance, and salaries, that are not directly tied to production.

Direct Labor Costs

Wages and benefits paid to employees who are directly involved in the production of goods or services.

Indirect Costs

Expenses not directly tied to the production of goods or services, such as overhead, rent, and administrative salaries.