Answer:
$37,000 and $13,000
Explanation:
The computation of the accounting profit and the economic profit is shown below:
Accounting profit = Total revenue - explicit cost
where,
Explicit cost = cost of helper + annual rent + material cost
= $12,000 + $5,000 + $20,000
= $37,000
So, the accounting profit is
= $72,000 - $37,000
= $35,000
And, the economic profit is
= Revenue - explicit cost - implicit cost
where,
Implicit cost = renting equipment + working for competitor + worth of entrepreneurial talents
= $4,000 + $15,000 + $3,000
= $22,000
So, the economic profit is
= $35,000 - $22,000
= $13,000
