Asked by Dolly Barboza on May 21, 2024
Verified
In a merchandising business, operating income plus operating expenses is equal to
A) cost of merchandise sold
B) cost of merchandise available for sale
C) sales
D) gross profit
Operating Income
Earnings from a company's main business activities, excluding expenses like interest and taxes.
Operating Expenses
Operating expenses are the costs associated with running a company's core business operations, excluding the cost of goods sold, such as rent, utilities, and payroll.
Merchandising Business
A type of business that purchases goods and sells them at a higher price without changing their form.
- Comprehend the idea of operating income and how it is calculated in a retail business context.
Verified Answer
VA
Valissa AbadiaMay 27, 2024
Final Answer :
D
Explanation :
Operating income is the same as gross profit, which is sales minus cost of goods sold. Operating expenses are subtracted from gross profit to calculate operating income. Therefore, operating income plus operating expenses is equal to gross profit.
Learning Objectives
- Comprehend the idea of operating income and how it is calculated in a retail business context.