1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
JulsSmile [24]
3 years ago
11

Chris owns his own business restoring antique cars. Last year, he restored 24 cars, which he sold for $1,100,000. The parts and

supplies necessary for the restoration totaled $400,000. He paid $360,000 to his six employees and a salary of $110,000 to himself. The rent and utilities on his building were $80,000. Recently, Chris received an offer to work as Jay Leno’s personal auto restorer, at a salary of $275,000. Chris also received a $180,000 offer to host a car-related reality TV show for the Discovery Channel. Chris can only work one job.
1. What is Chris's accounting cost?
a. $950,000.
b. $1,115,000.
c. $760,000.
d. $840,000.
What is his accounting profit?
a. $15,000.
b. $260,000.
c. $340,000.
d. -$150,000. .
2. What is Chris's economic cost?
a. $1,115,000.
b. $345,000.
c. $165,000.
d. $950,000.
What is his economic profit?
a. $755,000.
b. $935,000.
c. $150,000.
d. -$15,000.
3. Comparing what Chris earns in his current job—both his salary and his company's accounting profit—with his best outside offer, you can conclude that economic profits and losses show:_____.
a. how much an individual would earn in the individual's next best alternative minus how much he or she currently earns?
b. how much an individual currently earns minus how much the individual would earn in his or her next best alternative?
Business
1 answer:
Temka [501]3 years ago
7 0

Answer:

  1. a. $950,000.
  2. $150,000.
  3. a. $1,115,000.
  4. d. -$15,000.
  5. b. how much an individual currently earns minus how much the individual would earn in his or her next best alternative.

Explanation:

1. Chris's accounting cost

The accounting cost is the explicit cost of the business. The normal costs so to speak;

= Parts and supplies necessary for the restoration + Salaries to employees + Salary to himself + Rent and utilities

= 400,000 + 360,000 + 110,000 + 80,000

= $‭950,000‬

2. Chris's accounting profit

= Revenue - Accounting cost

= 1,100,000 - 950,000

= $150,000

3. Chris's economic cost

These are explicit + implicit (opportunity) cost.

The opportunity cost is the next best alternative which would have been the $275,000 if he had worked at Jay Leno’s personal auto restorer.

He would therefore forfeit the salary he earns now of $110,000.

= Accounting cost + Salary foregone - Salary

= 950,000 + 275,000  - 110,000

= $1,115,000

4. Chris's economic profit

= 1,100,000 - 1,115,000

= -$15,000

5. b. how much an individual currently earns minus how much the individual would earn in his or her next best alternative.

You might be interested in
The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed f
Sophie [7]

Answer:

Kindly check attached picture

Explanation:

Kindly check attached picture for detailed statement using the direct method

8 0
3 years ago
From the list​ below, select the variable that will cause the demand curve to​ shift: A. The number of firms in the market B. Th
butalik [34]

Answer:

Option (C) is correct.

Explanation:

Consumer income is one of the main determinant of demand. Consumer income is related with the demand of normal and inferior good.

If there is an increase in the income of a consumer then as a result the demand for a normal good increases and shifts the demand curve rightwards.

If there is a fall in the income of the consumer then as a result the demand for a normal good also decreases and shifts the demand curve leftwards.

Alternatively, the consumer income is inversely related with the demand for inferior goods.

4 0
3 years ago
A(n) _____ is a business that is based primarily in a single country but acquires some meaningful share of its resources or reve
NeTakaya

Answer: International business

Explanation:

 The international business is the term that is refers to the trade of the various types of products, technology and the services at international level.

The internal business encompasses all the activities as it is promoting the various types of ideas about the resources, products, revenue and the technologies across the international boundaries.

According to the given question, the international business is basically  acquired the various types of resources from the other countries easily and more efficiently.

Therefore, International business is the correct answer.  

3 0
3 years ago
Portman Corporation has retained earnings of $675,000 at January 1, 2014. Net income during 2014 was $1,400,000, and cash divide
mafiozo [28]

Answer:

attached below

Explanation:

3 0
3 years ago
When managers are evaluated on residual income, rather than on return on investment (ROI), they will be______(more/less) likely
anygoal [31]

When managers are evaluated on residual income, rather than on return on investment (ROI), they will be more likely to pursue projects that will benefit the entire company.

Explanation:

The most rising profitable formula is return on investments or ROI. There are several methods of calculating ROI, but dividing net income by total assets is the most common process.

If you have $100,000 net profits and $300,000 in cash, the ROI is $300,000. Thirty-three or three percent.

Due to its flexibility and simplicity, ROI is a common metric. In general, ROI can be used as a basic measure of the viability of an project. It may be the ROI for a capital sale, a company's ROI for an extension of a factory or ROI for an immobilisation operation.

4 0
3 years ago
Other questions:
  • How frequently does John typically receive account statements from his bank?
    7·1 answer
  • Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the envir
    8·1 answer
  • ABC Company is unloading coal from a barge on the Mississippi River. The barge contains 1,760 tons of coal. The coal is shoveled
    13·1 answer
  • Which technical review is held during the engineering and manufacturing development phase to assess the final design after the “
    8·1 answer
  • Statement of stockholders’ equity Financial information related to Organic Products Company for the month ended June 30, 20Y9, i
    15·1 answer
  • Falconer Company had net (after-tax) income last year of $14,107,956 and total capital employed of $131,869,720. Falconer's actu
    12·1 answer
  • USA Manufacturing issued 30-year, 7.5 percent semiannual bonds 6 years ago. The bonds currently sell at 101 percent of face valu
    5·1 answer
  • Pink Polka Fashion Inc., a multinational clothing brand, has plans to expand in the European Union (EU) marketplace. In order to
    13·1 answer
  • The classified Balance Sheet will subsection the assets section as follows a. Current Assets and Property, Plant, and Equipment
    15·1 answer
  • Haulsee Inc. builds 800,000 golf carts a year and purchases the electronic motors for these carts for $370 each. Ordering costs
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!