Berling, Inc, had the following transactions during Year 1: Paid salaries of $20

Question

Berling, Inc, had the following transactions during Year 1: Paid salaries of $20,000 Purchased inventory for $30,000 Incurred advertising expenses of $100,000 Incurred depreciation of $9,000 Office building maintenance costs of $9,500* Earned revenue of $800,000 · . · . · Management is planning to implement a new project. If the new project is implemented, the following additional transactions will occur: Additional revenue of $10,000 . . Overtime payment of $4,000, S2,000 of which will be paid to unproductive workers *If Berling were to lease its office building, it would receive annual rent of $50,000. After careful analysis, Berling decided to implement the new project. Based on the above information, enter the amount for each item in the shaded cells below. Item Amount 1. Revenue 2. Opportunity cost 3. Accounting cost 4.Explicit cost 5. Implicit cost 6. Accounting profit (loss) 7. Economic profit (loss)

Explanation / Answer

Particulars Amount Special Comments for understanding Revenue $ 8,10,000.00 Includint additonal revenue of the year Opportunity Cost $      40,500.00 Rent foregone minus maintainance cost Accounting Cost $ 1,72,500.00 Salaries+inventory+advertsing+depreciation+maintainance+labour Explicit Cost $ 1,72,500.00 All the cost incurred above shall be included Implicit Cost $      50,000.00 $9500 shall not be deductted from the rent Accounting Profit (Loss) $ 6,37,500.00 Revenue - Explicit Cost Economic Proft (Loss) $ 5,87,500.00 Revenue - Explicit Cost - Implicit Cost

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.