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

question 109

Short Answer

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

• A)Operating income = [Sales price per unit – Variable cost per unit x # units sold] – Fixed cost
• B)Operating income = [Sales price per unit – Fixed cost per unit x # 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:

Improper Fraction

A fraction in which the top number is greater than or equal to the bottom number.

Mixed Fraction

A mathematical expression combining a whole number and a proper fraction.

Mixed Fraction

A number consisting of an integer and a proper fraction (e.g., 3 1/2).

Whole Number

Non-negative integers, including zero, without fractions or decimals, representing complete units.