What is the formula to calculate operating income?
A)sales revenue − cost of goods sold − selling and administrative expenses
B)gross margin − selling expenses + selling and administrative expenses
C)sales revenue − cost of goods sold + selling and administrative expenses
D)sales revenue − selling and administrative expenses

Question

Quizplus · Accepted Answer

Operating income is calculated by subtracting cost of goods sold and selling and administrative expenses from sales revenue. This leaves only the income generated from the company's core operations. The formula is: Operating income = Sales revenue - Cost of goods sold - Selling and administrative expenses.

What Is the Formula to Calculate Operating Income