How is the calculation of operating profit determined?

The calculation of operating profit is best determined by taking gross income and subtracting operating expenses, which aligns closely with the concept of calculating operating profit. While the answer provided cites net profit and units, this brings in elements that don't pertain to how operating profit is calculated in a standard accounting framework.

Operating profit reflects the profit a company makes from its core business operations, excluding any income derived from non-operational activities, taxes, and interest expenses. It is typically calculated using gross income, which is total revenue minus the cost of goods sold (COGS), and subtracting operating expenses directly related to the business operations, such as wages, rent, and utilities.

In contrast, net profit represents the total income remaining after all expenses, including non-operational costs, have been accounted for. Therefore, the method cited in the right choice does not accurately reflect how operating profit is calculated and the focus required for such a computation.

To clarify further, the other options — total revenue divided by expenses, or fixed costs minus variable costs — also do not correctly describe how to compute operating profit. These formulas pertain to different aspects of financial analysis and do not yield the operational insight that operating profit is meant to represent. Understanding how each profit measure relates to a