Complete question:
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000.
Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. Christine could earn $6,000 per year as a tax preparer. What is the annual accounting profit of her cookie jar business?
Answer: $36,000
Explanation:
Amount from personal saving balance = $5000
Annual interest rate on saving = 1%
Annual revenue fro selling cookie jar = $90,000
Explicit cost of cookie jar materials = $54,000
Amount to be earned as a tax preparer = $6000
Accounting profit = Total revenue - Explicit cost
Accounting profit = $90,000 - $54,000
Accounting profit = $36,000
