Profit identity: Profit, in standard accounting for process plants, equals revenue minus __________.

Introduction / Context:Clear definitions avoid confusion when comparing projects. Profit is the residual after all costs are deducted from revenue. Distinguishing between total cost and subsets like operating cost is essential in plant economics and project appraisal.

Given Data / Assumptions:

• Total cost includes operating costs, fixed charges, depreciation, and other expenses.
• Revenue refers to gross earnings from product sales or services.
• We focus on accounting profit (not cash flow).

Concept / Approach:Profit = Revenue − Total cost. Operating cost is only a portion of total cost. Book value is a balance sheet figure, not a cost component in the profit identity.

Step-by-Step Solution:

Verification / Alternative check:Sample income statements directly show profit (EBIT, EBT, net) computed by subtracting comprehensive cost categories from revenue.

Why Other Options Are Wrong:

Common Pitfalls:Confusing EBITDA with profit; EBITDA excludes depreciation and interest—profit includes appropriate expense categories per the definition used.

Final Answer:total cost