Question

Rescooperate Ice Cream Shop recently analyzed their books. They found that in the past year, they made $100,000 selling ice cream and spent $75,000 on supplies and factory space. The remaining $25,000 represents
profit.


loss.


revenue.


expense.

Answer 1

Answer:

In this case earning is higher than expenses by $25000, hence it is profit

Explanation:

from the data given in the question

Total amount gain after selling ice cream is $100,000

Total amount on expenses including supplies and factory space is $75,000

we know that if expenses is less than earning then it indicate profit to the organisation else loss

In this case earning is higher than expenses by $25000, hence it is profit

Answer 2

The remaining $25,000 represents the profits earned by the Rescooperate Ice Cream Shop.

Further explanation:

Profits: A producer engages in the production activity with a motive to earn profits after selling of the produced goods. The profits of the producers are measured by the following equation:

$\begin{aligned}Profits=Revenue-Costs\end{aligned}$

Justification for correct and incorrect option:

profit: This option is correct.  

Profits of a firm are measured by subtracting the costs incurred by the firm from its overall generated revenue. Rescooperate Ice Cream Shop raised $100,000 last year by selling ice creams. And, the costs incurred on supplies and factory space by the Ice Cream Shop are $75,000. The difference between the two is $25,000 that represents the profits earned by the Ice Cream Shop.

loss: This option is incorrect.

A firm incurs a loss when its revenue from the sale of goods and services is less than its costs incurred. Here, Rescooperate Ice Cream Shop has raised revenue of $100,000 that is more than the costs incurred of $75,000. Thus, the Ice Cream Shop has made a profit, not a loss.  

revenue: This option is incorrect.

The revenue of a firm is an amount that the firm raises by selling goods and services. Rescooperate Ice Cream Shop has made $100,000 by selling goods and services. Thus, the revenue of the Ice Cream Shop is $100,000, not $25,000.  

expense: This option is incorrect.  

The expense of a firm is an amount that the firm incurs for facilitating the production activities. Rescooperate Ice Cream Shop has incurred $75,000 on supplies and factory space. Thus, the expense of the Ice Cream Shop is $75,000, not $25,000.  

Learn more:

1. Learn more about the profit margin  brainly.com/question/10218300
2. Learn more about the revenue  brainly.com/question/1337739
3. Learn more about variable and fixed expenses  brainly.com/question/7854996

Answer details:

Grade: High School

Subject: Economics

Chapter: Profits and Loss

Keywords: rescooperate ice cream shop, analyzed their books, found in the past year, selling ice creams, spent, supplies and factory space, remaining represents, profit, loss, revenue, expense, the motive to earn profits, producers engage in production activities, ice cream shop, expenditure to facilitate production activity.