Question

Veruca sells therapeutic bath salts on the Internet. Her annual revenue is​ $52,000 per​ year, the explicit costs of her business are​ $14,000, and the opportunity costs of her business are​ $17,000 per year. What is her accounting​ profit? A. ​$14,000 B. ​$21,000 C. ​$31,000 D. ​$38,000

Answer 1

D. ​$38,000

Step-by-step explanation:

The formula to compute the accounting profit is shown below:

Accounting profit = Annual revenue - Explicit cost

= $52,000 - $14,000

= $38,000

It shows a relationship between the annual revenue and the explicit cost. The difference between these two is known as accounting profit.