\". Calculate the following Costs and Profit. · Annual revenue from sales $380,0
ID: 1109532 • Letter: #
Question
". Calculate the following Costs and Profit. · Annual revenue from sales $380,000 Entrepreneur's potential earnings as a salaried worker= $50,000 rate of 10% Annual lease payment on building = $22,000 ur's personal fund used to finance the business is $60,000, assuming deposit interest wage payment to workers = $120,000 Utilities (electricity, water, disposal) cost incurred = $8,000 Entrepreneur's forgone rent for his own office property = $10,000 A. explicit costs? B. implicit costs? C. accounting costs? D. economic costs? E. accounting profit? F. economic profit? (END)Explanation / Answer
A) Explicit cost = 22,000 + 120,000 + 8,000 = $150,000
B) Implicit Cost = 50,000 + (0.10 *60,000) + 10000
= 50,000 + 6,000 + 10,000
= $66,000
C) Accounting cost = Explicit costs = $150,000
D) Economic cost = Explicit cost + Implicit cost = 150,000 + 66,000 = $216,000
E) Accounting profit = Annual Revenue - Accounting cost
= 380,000 - 150,000
= $230,000
F) Economic profit = Annual Revenue - Economic cost
= 380,000 - 216,000
= $164,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.