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eduard
2 years ago
5

Economan has been infected by the free enterprise bug. He sets up a firm on extraterrestrial affairs. The rent of the building i

s $6,000, the cost of the two secretaries is $42,000, and the cost of electricity and gas comes to $7,000. There’s a great demand for his information, and his total revenue amounts to $130,000. By working in the firm, though, Economan forfeits the $65,000 he could earn by working for the Friendly Space Agency and the $6,000 he could have earned as interest had he saved his funds instead of putting them in this business.
a. What is his profit or loss by an accountant’s definitions?
Instructions: Round your answer to the nearest whole dollar and use a (-) if the number is negative.
Accounting profit is ($ . )
b. What is his profit or loss by an economist’s definitions?
Instructions: Round your answer to the nearest whole dollar and use a (-) if the number is negative.
Economic profit is ( $ . )
Business
2 answers:
monitta2 years ago
7 0

Answer:

There are two types of profit and costs in nay business, which are accounting costs/profit and the economic costs/profits.

Accounting costs include everything that is tangible or the monetary costs a firm pays, while the economic costs include the cost which is intangible(Opportunity costs) as well as tangible.

Here in this question, the profit of the firm therefore is,

a. From an accountant;s definition = 130000-(6000+42000+7000) = 75000.

b. From an economist's definition = 130000-(6000+42000+7000+65000+6000) = 4000.

Hope this helps you. Thankyou.

Karo-lina-s [1.5K]2 years ago
3 0

Answer:

$4,000

Explanation:

A) accounting profit only considers explicit revenues and costs which have clearly defined monetary values:

total revenue =              $130,000

rent =                               ($6,000)

secretaries' salaries =  ($42,000)

<u>utilities =                          ($7,000)</u>

accounting profit =        $75,000

B) economic profit considers both explicit revenues and costs plus opportunity costs. Opportunity costs are the extra costs or benefits lost resulting from choosing one activity or investment over another alternative.

economic profit = accounting profit - opportunity costs

  • accounting profit = $75,000
  • forfeited salary = ($65,000)
  • lost interest revenue = ($6,000)

economic profit = $75,000 - $65,000 - $6,000 = $4,000

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Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $3,750,000 (250,00
Zepler [3.9K]

Answer:

Allocated overhead= $1,430,600

Explanation:

Giving the following information:

The company's executives estimated that direct labor would be $3,750,000 (250,000 hours at $15/hour) and that factory overhead would be $1,550,000 for the current period.

The records show that there had been 230,000 hours of direct labor.

Using direct labor hours as a base.

Predetermined overhead rate= total estimated manfacturing overhead for the period/ total amount of allocation base

Predetermined overhead rate= 1555000/250000= $6.22 per hour

Allocated overhead= Predetermined overhead rate*actual hours= 6.22* 230000= $1,430,600

7 0
3 years ago
The paying of a fee to use another firm�s name, resources, and operating systems is called __________.
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Franchising is the practice of paying a company to use its name, resources and operation systems.
7 0
3 years ago
Four degrees of competition
Neko [114]

Answer:

There are four types of competition in a free market system:

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Hope this helps :)

4 0
3 years ago
3. Working with Numbers and Graphs Q3 Suppose that a small business sells 975 units of goods per month at $30 per unit. The unit
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Answer:

economic profit  = $11225

Explanation:

given data

sells = 975 units

cost = $30 per unit

cost of producing goods = $15

implicit costs = $3,400

solution

total revenue = 975 × 30 = $29250

and total cost = 975 × 15  = $14625

so here Total profit will be as

Total profit = $29250 - $14625  = $14625

so here economic profit will be

economic profit  = Total profit  - implicit costs

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economic profit  = $11225

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solmaris [256]

Answer:

Answer A

Explanation:

Revenue expenditures are the expenditures during period in which the asset has been put into its usage. They are often discussed in the context of fixed assets. For instance if a company installs new equipment and has monthly costs of its maintenance, these costs are revenue expenditures. Therefore, they only present additional costs that do not necessarily increase asset's life.

4 0
3 years ago
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