Question

I own a factory which I could lease for $100,000 per year. Instead I use it for my own business making PlayDo figures. I earn $200,000 per year selling my PlayDo figures ... the PlayDo costs me $1,000 per year. If I were not making PlayDo figures I would be working as a bouncer at the Foothill Cafeteria making $99,000 per year (....it's a tough crowd). Considering only these expenses... My accounting profits as a PlayDo artist are:

Answer 1

Answer:

$199,000

Explanation:

According to the scenario, computation of the given data are as follow:-

We can calculate the accounting profit by using following formula:-

Accounting Profits = Total Sales - Cost

By putting the value we get,

= $200,000 - $1,000

= $199,000

According to the analysis, his accounting profits as a play do artist are $199,000.