Select the Equation for Calculating Operating Income

question 12

Multiple Choice

Select the equation for calculating operating income.

• A) Current Liabilities + Long term Liabilities = Operating Income
• B) Current Assets + Fixed Assets = Operating Income
• C) Gross Profit - Total Operating Expenses = Operating Income
• D) Assets + Liabilities = Operating Income

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Definitions:

Backlog

The accumulation of unfinished work or orders not yet processed, often indicating a delay in production or delivery.

Safety Capacity

Additional capacity reserved to ensure a system can meet unexpected demand spikes, thereby reducing the risk of service or product delivery failure.

Planning Horizon

The future period over which an organization forecasts its operations and plans its strategies.

Aggregate Plan

An approach to operational planning that seeks to balance demand and supply in a way that minimizes costs over a medium-term period, focusing on general output levels.