If an Organization Wants to Make a Profit,it Must Generate

question 103

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 x # units produced] – Variable cost
• B)Operating income = [Contribution margin per unit x # 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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