Suppose Alex owns a business making quilts that generates $6,000 a month in revenue. Each month,...
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Suppose Alex owns a business making quilts that generates $6,000 a month in revenue. Each month, Alex spends $1,500 on fabric and other sewing materials, and he pays his two employees a combined total of $4,000 per month (they each earn $2,000). Alex makes his quilts in a workshop he has set up in his basement. If Alex did not own the quilt business, he would work as a yoga instructor earning $1,400 per month, and he would use the basement as a TV room, an option he would value at $60 per month. a. What is Alex's accounting profit? Instructions: Enter your answer as a whole number. If you are entering a negative number, be sure to include a negative sign (-). $ b. What is Alex's economic profit? Instructions: Enter your answer as a whole number. If you are entering a negative number, be sure to include a negative sign (-). Suppose Alex owns a business making quilts that generates $6,000 a month in revenue. Each month, Alex spends $1,500 on fabric and other sewing materials, and he pays his two employees a combined total of $4,000 per month (they each earn $2,000). Alex makes his quilts in a workshop he has set up in his basement. If Alex did not own the quilt business, he would work as a yoga instructor earning $1,400 per month, and he would use the basement as a TV room, an option he would value at $60 per month. a. What is Alex's accounting profit? Instructions: Enter your answer as a whole number. If you are entering a negative number, be sure to include a negative sign (-). $ b. What is Alex's economic profit? Instructions: Enter your answer as a whole number. If you are entering a negative number, be sure to include a negative sign (-).
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a To calculate Alexs accounting profit we need to subtract his total explicit costs costs that inv... View the full answer
Related Book For
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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