The rental income Brian could receive if he chose to rent out his showroom
The salary Brian could earn if he worked as a financial advisor
Explicit costs:
The wages and utility bills that Brian pays
The wholesale cost for the pianos that Brian pays the manufacturer
2. Brian's accounting and economic profit of his piano business:
Accounting profit = $62,000
Economic profit (loss) = ($3,000)
Explanation:
a) Data and Calculations:
Accounting Profit Economic Profit
Sales Revenue $793,000 $793,000
Cost of pianos 430,000 430,000
Wages and utility bills 301,000 301,000
Implicit (Opportunity) Costs:
Rent 15,000
Salary as an accountant 50,000
Total costs 731,000 796,000
Profit (loss) $62,000 ($3,000)
b) Implicit costs are opportunity costs. They include the costs that arise from forgone benefits when another opportunity is taken instead of the other. Explicit costs are costs that are actually incurred by taking an opportunity.
Arianna is engaged in the category management of the store.
Category management is involved in the retailing and the purchasing concept by
which it ranges the products that are being purchased or the products that are
being sold into categories that are being broken down in discrete groups that
are in similar or products that are related.
The one responsible for inspecting the records for inspection during business hours is the commission. The commission is being defined as a person with authority or given authority in regards to working conditions in which they are responsible for inspecting the broker's records.
