Question

Systems Solutions had expenses of $20,153. What was their profit after expenses?

A) $20,153
B) $0 (break-even)
C) -$20,153
D) The profit cannot be determined from the given information.

Answer 1

The correct answer is that the profit cannot be determined from the given information.

Step-by-step explanation:

In order to determine the profit of Systems Solutions, we need to know their total revenues. Without this information, it's impossible to calculate profit, as profit is typically defined as total revenues minus total expenses. The question provides the expense amount but does not provide the revenue figure.

For the self-check question provided, here's the calculation:

1. The firm's sales revenue was $1 million.
2. The explicit costs are the sum of labor, capital, and materials, which equals $600,000 for labor, $150,000 for capital, and $200,000 for materials, totaling $950,000.
3. To determine the accounting profit, subtract the explicit costs from the revenues: $1,000,000 - $950,000 = $50,000.