If an Organization Wants to Make a Profit, It Must

question 134

Multiple Choice

If an organization wants to make a profit, it must generate more sales revenue than the total costs it incurs.This relation can be expressed using which of the following profit equations?

• A)Operating income = [(Sales price per unit - Variable cost per unit) × # units sold] - Fixed cost
• B)Operating income = [Sales price per unit - Fixed cost per unit) × # units produced] - Variable cost
• C)Operating income = Sales revenue - Total variable costs - Discretionary costs
• D)Operating income = Sales revenue - Committed costs - Fixed costs

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Definitions:

Exchange Rates

The price at which one currency can be exchanged for another, influencing international trade and economics.

Capital Assets (Net)

Capital Assets (Net) are long-term assets minus accumulated depreciation, representing the net amount that reflects the value of the assets that a company uses in its operations over time.

Functional Currency

The primary currency used by a business for its accounting, often associated with its primary economic environment.

Amortization

The method of slowly depreciating the initial value of an intangible asset over its lifetime.