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
Lerok [7]
3 years ago
6

1. You and your best friend are brilliant entrepreneurs who are considering opening your own business tutoring struggling colleg

e students in economics. This wonderful endeavor takes the place of the job you were offered working for a rival tutoring service and earning $2,500 a month. Your best friend was offered a similar job at $2,000 (better not tell him about your offer!). Operating expenses for your tutoring business will total $4,000 monthly when you include variable costs such as hiring other tutors. Additionally you will need to lease a building to work out of for $2,000 per month. Together the two of you have enough to cover these operating expenses and the lease but if you pull that money out of your bank accounts you will lose out on $500 in interest income you could have collectively earned. You anticipate revenue from your tutoring business will be $10,000 per month. a. What would be the accounting profit/loss for your business? What about the economic profit/loss? b. Should you and your friend open the business? Why or why not?
Business
1 answer:
Anuta_ua [19.1K]3 years ago
4 0

Answer:

a. Accounting profit for the business = $3,500

b. Economic loss = $1,000

c. The two friends can open the business and incur economic loss of $1,000 in the first year of operation.  In subsequent years, the revenue may increase to generate better economic profit.  This is the labor, risk, and reward of entrepreneurship.

d. If the two friends do not go ahead with the business because of the economic loss they suffer in the first year of operation, then they cannot be regarded as entrepreneurs.  They are merely laborers who cannot assume any risk for greater rewards tomorrow.

Explanation:

Cost of business per month:

Operating expenses = $4,000

Lease of building =        2,000

Total expenses =        $6,000

Revenue =                 $10,000

Accounting profit       $4,000

Economic profit:

Revenue =               $10,000

Total expenses =     $6,000

Opportunity costs:

Lost salaries              4,500

Lost Interest                500

Total costs             $11,000

Economic loss =     $1,000

You might be interested in
In the context of skills of successful managers, making sacrifices to encourage and promote desired outcomes in an organization
Zielflug [23.3K]

Answer: monitoring operation

Explanation:

Monitoring operations requires management oversight, employee feedback and customer reviews. It can help provide specific directions for employees, which can lead to improved time management and increased productivity.

4 0
4 years ago
Evaluate the following​ statement: Banks use deposits to make consumer loans to households and commercial loans to businesses. B
Sav [38]
To night it is fffffffffffffalse
3 0
4 years ago
Closing march 15, next payment due april 1. how many months of escrow can lender take for taxes
Naddika [18.5K]

It will be escrow of 3 months can the lender take for taxes. The closing statement is also known as settlement sheet. It is also similar into an opening statement in some ways but differs in other ways. It may also refer to closing argument or summation. The statement of each party may counsel in a court case.

6 0
3 years ago
Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costi
zavuch27 [327]

Answer:

Explanation:

Process costing can be regarded as a methodology in accounting that involves attributing cost to unit of production in different firms especially firm that are producing product that are homogeneous.

Job order costing can be regarded as

a system that occur when an order of purchase is made by consumer, it helps in way that the price of individual product is affordable by consumer.

a.Companies that produce small quantities of many different products.

(Job order costing)

b.A company that pulverizes wood into pulp to manufacture carboard.

(Process costing)

c.A company that manufactures thousands of identical files.

(Process costing)

d.Companies that produce large numbers of identical products.

(Process costing)

e.A computer repair service that makes service calls to homes.

(Job order costing)

f.A company that assembles electronic parts and software to manufacture

(Process costing)

millions of portable media players.

g.A textbook publisher that produces copies of a particular book in batches.

(Job order costing)

h.A company that bottles milk into one-gallon containers.

(Process costing)

i.A company that makes large quantities of one type of tankless hot water heaters.

(Process costing)

j.A governmental agency that takes bids for specific items it utilizes where each

(Job order costing)

.

7 0
3 years ago
Name three or four public services that are made available through the revenue from taxes.
AveGali [126]
General welfare, food stamps, and education
6 0
3 years ago
Other questions:
  • The marginal benefit you receive from eating a third slice of pizza will be __________ the marginal benefit you receive from eat
    10·1 answer
  • Mia is concerned how her marketing activities will affect individual consumers as well as society at large. mia is implementing
    7·1 answer
  • Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if: 1) differentiatio
    7·1 answer
  • The Federal Open Market Committee (FOMC) makes decisions regarding the___________.
    12·1 answer
  • On June 3, Swifty Company sold to Chester Company merchandise having a sale price of $3,300 with terms of 2/10, n/60, f.o.b. shi
    15·1 answer
  • Use the information below to answer the questions that follow.
    5·1 answer
  • In times of falling prices, choosing LIFO over FIFO as an inventory cost method would affect the financial statements as follows
    13·1 answer
  • When society produces the combination of goods and services on the ppf that it values the most highly, society has?
    12·1 answer
  • Tara is a junior clerk at an auditing firm. Her supervisor asks her to close all the fictitious accounts before they prepare the
    7·1 answer
  • 4. Tim moves to a different state and buys a house in his new city. His new house is bigger than the apartment he lived in befor
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!