Question

Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized

town in Montana. Data regarding the store's operations follow:The accounts receivable balance, net of uncollectible accounts, at the end of December would be:
A. $154,000
B. $157,500
C. $85,500
D. $303,600

Answer 1

The firm's accounting profit is calculated by subtracting the sum of labor, capital, and materials costs from the sales revenue. With a revenue of $1 million and total costs of $950,000, the firm's accounting profit is $50,000.

Step-by-step explanation:

The subject question concerns the calculation of a firm's accounting profit based on given financial information. To calculate the accounting profit, we subtract the total costs (labor, capital, and materials) from the sales revenue. In this scenario, the firm's sales revenue was $1 million. The costs incurred include $600,000 on labor, $150,000 on capital, and $200,000 on materials. Therefore, the accounting profit would be calculated as follows:

• Sales revenue: $1,000,000
• Total costs: ($600,000 + $150,000 + $200,000) = $950,000
• Accounting profit: Sales revenue - Total costs = $1,000,000 - $950,000 = $50,000