Homework Answers
Accounting profit = total revenue - explicit costs
Economic profit = accounting profit - implicit costs
| TR | AP | EP |
| 710000 | 97000 | -23000 |
| 760000 | 147000 | 27000 |
| 850000 | 237000 | 117000 |
| 880000 | 267000 | 147000 |
Formula:-
| TR | AP | EP |
| 710000 | =TR-(520000+71000+22000) | =AP-120000 |
| 760000 | =TR-(520000+71000+22000) | =AP-120000 |
| 850000 | =TR-(520000+71000+22000) | =AP-120000 |
| 880000 | =TR-(520000+71000+22000) | =AP-120000 |
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ANSWERS MUST BE CLEAR TO READ! THANKS! SHOW ALL YOUR
CALCULATIONS FOR ACCOUNTING AND ECONOMIC PROFIT!
Kenji lives in Houston and runs a business that sells pianos. In an average year, he receives $704,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,00o. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume...
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MICROECONOMICS ECONOMIC VS. ACCOUNTING PROFITS - HOMEWORK BSE 2212 2) Chapter 9 #1. Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if has been offered $15,000 per year to work as a potter for...
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