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2 years ago

Distinguish between economic and accounting profit

Business

2 answers:

Masja [62]2 years ago

8 0

Answer:

The main difference between accounting and economic Profit is that accounting profit refers to monetary revenue minus monetary costs which includes any type of cost in the organization in the form of rents, salaries, material costs etc. Economic profit refers to the monetary revenue minus total cost.

Explanation:

maksim [4K]2 years ago

5 0

The differences between economic and accounting profits exist in their definitions, despite their similarities.

<h3>What is economic profit?</h3>

Economic profit has the following characteristics:

It includes both explicit and implicit costs.
It is determined by economic principles, especially the economic concept of opportunity cost.
In summary, economic profit is the total revenue minus both implicit (opportunity cost) and explicit costs.

<h3>What is accounting profit?</h3>

Accounting profit has the following characteristics:

It includes only explicit costs.
It is determined by accounting principles (U.S. GAAP or IFRS).
It is equal to net income or revenue minus explicit expenses.

Thus, there are differences between accounting and economic profits.

Learn more about economic and accounting profit at brainly.com/question/25742185

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One of the lessons that we learned from the Ford Pinto case was that:_________

Oksi-84 [34.3K]

Answer: option 3

Explanation:

Background to the case:

The cases involving the explosion of Ford Pinto's due to a defective fuel system design led to the debate of many issues, most centering around the use by Ford of a cost-benefit analysis and the ethics surrounding its decision not to upgrade the fuel system based on this analysis.

Basis of analysis:

Should a risk/benefit analysis be used in situations where a defect in manufacturing could lead to seriously bodily harm and even worse death, such as in the Ford Pinto situation?

Rule of the court:

There hasn’t really been a definite decision about the case and arguments both for and against such an analysis have been made. It is an economically efficient method which has been accepted by courts for numerous years, however, juries may not always agree, so companies should take this into account.

Discretion is expected to be used.

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3 years ago

How does inflation hurt your savings?

siniylev [52]

Answer:

have to spend more money

Explanation:

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3 years ago

An investment has the following payment structure: 1,000 payable in one year, 1,000 payable in two years, and 1,000 payable in t

Shtirlitz [24]

Answer: C. 7.3%

Explanation:

The yield rate is a weighted average of the yields over the years:

= [ (1 * 6%) + (2 * 7%) + (3 * 8%)] / ( 1 + 2 + 3)

= 44%/ 6

= 7.33%

= 7.3%

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3 years ago

Layla Fox is a creative, imaginative, artistically sensitive individual who loves to take on new opportunities. She is a success

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Answer: B. Openness to experience

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3 years ago

At the beginning of the year, Smith Company budgeted overhead of $129,600 as well as 13,500 direct labor hours. During the year,

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Answer:

1. 9.60 per hour

2. $11,129

3. Dr Manufacturing overhead 172500

Cr Lease payable 6800

Cr Accumulated depreciation-Building 19340

Cr Wages payable 90400

Cr Utilities payable 14560

Cr Account payable 41400

4. Over applied overhead= $1,260

5. $634,340

Explanation:

1) Calculation for the overhead rate for the year

Using this formula

Overhead rate = Estimated overhead/Estimated hour

Let plug in the formula

Overhead rate = 129600/13500

Overhead rate = 9.60 per hour

2) Calculation for the total cost of Job K456

Total cost of Job K456

Direct material 2750

Direct labor 5355

Overhead 3024

(5355/17*9.60)

Total cost of Job $11129

3) Preparation of the journal entries to record actual overhead and to apply overhead to production for the year.

Dr Manufacturing overhead 172500

(6800+19340+90400+14560+41400)

Cr Lease payable 6800

Cr Accumulated depreciation-Building 19340

Cr Wages payable 90400

Cr Utilities payable 14560

Cr Account payable 41400

(Being To record actual overhead)

Work in process (18100*9.6) 173760

Manufacturing overhead 173760

(To record applied overhead)

4) Calculation for whether overhead is overapplied or underapplied

Over applied overhead = 173760-172500

Over applied overhead= $1260

5) Calculation for the adjusted cost of goods sold

Adjusted cost of goods sold = 635600-1260

Adjusted cost of goods sold= $634340

8 0

3 years ago