Question

Jill resigns from her job, at which she was earning $50,000 per yer, and uses her $100,000 savings on which she was earning 5 percent interest, to start a business. In the first year she earns revenue of $150,000 and her costs are as follows; Rent 25,000, Utilities 12,000, wages 30,000, materials 20,000 calculate Jill's accounting profit

Answer 1

Answer:

$63,000

Explanation:

Accounting profit is total revenue less total explicit cost

Total cost = 25,000 + 12,000 + 30,000 + 20,000 = 87,000

Revenue = $150,000

Accounting profit = = $150,000 - 87,000 = $63,000

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