If an Organization Wants to Make a Profit, It Must

question 126

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

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