Operating Income Is

question 65

Multiple Choice

Operating income is:

• A)net sales less cost of goods sold.
• B)earnings before interest and tax.
• C)earnings before tax and nonrecurring items.
• D)gross profit less operating expenses.
• E)net income plus interest.

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Definitions:

Fixed Input

Resource in production that cannot be changed in the short term, such as buildings and machinery.

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to any change in market conditions.

Manufacturer

An entity engaged in the conversion of raw materials or components into finished goods for sale.

Total Product Curve

A graphical representation showing how the total quantity of output of a good or service varies with the amount of a variable input used in production.