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:Accounts payable at the end of December would be:
A. $271,500
B. $105,000
C. $166,500
D. $262,500

Answer 1

To calculate the firm's accounting profit, subtract all expenses from the sales revenue. The firm's accounting profit is $50,000.

Step-by-step explanation:

To calculate the firm's accounting profit, you need to subtract all expenses from the sales revenue. In this case, the firm's sales revenue is $1 million, and the expenses include $600,000 for labor, $150,000 for capital, and $200,000 for materials. Accounting profit is calculated as: Accounting Profit = Sales Revenue - Labor Expenses - Capital Expenses - Materials Expenses. Substituting the given values: Accounting Profit = $1,000,000 - $600,000 - $150,000 - $200,000 = $50,000. Therefore, the firm's accounting profit is $50,000.