Question

When mary potts arrived at her store on the morning of january 29, she found empty shelves and display racks;

a) thieves had broken in during the night and stolen the entire inventory.
b) accounting records showed that potts had inventory costing $52,000 on january 1. from january 1 to january 28, potts had made net sales of $72,800 and net purchases of $83,200.
c) the gross profit during the past several years had consistently averaged 40 percent of net sales.
d) potts plans to file an insurance claim for the theft loss.

Answer 1

The firm's accounting profit can be calculated by subtracting the explicit costs from the sales revenue.

Step-by-step explanation:

The firm's accounting profit can be calculated by subtracting the explicit costs (labor, capital, and materials) from the sales revenue. In this case, the accounting profit would be $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000.