If an Organization Wants to Make a Profit, It Must

question 98

Multiple Choice

If an organization wants to make a profit, it must generate more sales revenue than the total costs it incurs.Which of the following is not a correct expression of the profit equation?

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

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Definitions:

Metric Tons

A unit of mass equal to 1,000 kilograms, or approximately 2,204.6 pounds, used worldwide in industrial and commercial applications.

Pounds

Pounds is a unit of weight commonly used in the United States and the British Commonwealth, equivalent to 0.453592 kilograms.

Chicken Stock

A flavorful liquid prepared by simmering chicken bones, vegetables, and herbs, used as a base for soups and sauces.

Liters

A metric unit of capacity, commonly used for measuring volumes of liquid, equal to 1000 cubic centimeters or about 1.76 pints.