Which of the following equations is correct A. Sales revenue - variable expenses

Question

Which of the following equations is correct
A. Sales revenue - variable expenses - fixed expenses=operating income
B. Sales revenue - fixed expenses + variable expenses - operating income
C. Sales revenue=variable expenses-(fixed expenses+operating income)
D. Sales revenue+variable expenses+fixed expenses=operating income Which of the following equations is correct
A. Sales revenue - variable expenses - fixed expenses=operating income
B. Sales revenue - fixed expenses + variable expenses - operating income
C. Sales revenue=variable expenses-(fixed expenses+operating income)
D. Sales revenue+variable expenses+fixed expenses=operating income
A. Sales revenue - variable expenses - fixed expenses=operating income
B. Sales revenue - fixed expenses + variable expenses - operating income
C. Sales revenue=variable expenses-(fixed expenses+operating income)
D. Sales revenue+variable expenses+fixed expenses=operating income

Explanation / Answer

Answer A:

Explanation : Marginal Cost equation is as follows

Sales Revenue - Variable Cost = Contribution = Fixed Cost + Operating Profit ; Hence, the given equation should be

Sales revenue - variable expenses -fixed expenses = Operating Profit

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