John runs a small bakery in his neighborhood, John's Delightful Bakery. He bakes a variety of delicious
Question:
John runs a small bakery in his neighborhood, John's Delightful Bakery. He bakes a variety of delicious pastries and bread, and his business has been quite successful. John used to work as a manager in a nearby restaurant before starting his bakery, and he quit his job to focus on the bakery. His salary was $ To assess the overall performance of his bakery, John meticulously tracks his financials. For the year John has gathered the following information:
Total revenue from pastry and bread sales: $
Cost of ingredients and materials: $
Rent for the bakery space: $
Wages paid to his employees: $
Advertising expenses: $
NB
The bakery space could be rented out for $ per year if John did not use it for his bakery.
John invested $ of his personal savings into the bakery when he started it These savings could have earned him a annual interest in a bank savings account
Calculate John's economic profit for the year
a $
b $
c $
d
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay