What is the cost incurred in producing or acquiring a product or service intended for sale in business?

The correct answer is the cost of goods sold, which represents the direct costs attributable to the production of the goods sold by a company. This includes costs such as materials, labor, and any direct expenses associated with the manufacturing process or acquisition of goods meant for resale. Understanding the cost of goods sold is essential for businesses as it directly affects gross profit, and ultimately, the overall profitability of the company.

In contrast, operating income refers to the earnings generated from regular operational activities, excluding any non-operating income or expenses, which can include cost of goods sold but also incorporates other operational costs. Gross profit, on the other hand, is calculated by subtracting the cost of goods sold from total sales revenue, giving insight into the company's efficiency in producing and selling its products. Net income represents the total profit after all expenses, taxes, and non-operating costs have been deducted from total revenue. Each of these terms plays a crucial role in financial analysis, but the cost of goods sold specifically addresses the costs incurred in bringing products to market, which makes it the correct answer.