Final answer:
Office Today's gross profit is $160 million with a gross profit percentage of 20%.
The option that matches this calculation is A). For the self-check question, a firm with $1 million in revenue and explicit costs of $950,000 has an accounting profit of $50,000.
Step-by-step explanation:
To calculate Office Today's gross profit, we subtract the cost of goods sold from the revenue. So, the calculation would be $800 million (revenue) - $640 million (cost of goods sold) = $160 million.
Next, to find the gross profit percentage, we take the gross profit and divide it by the revenue, then multiply by 100 to get a percentage. The calculation is ($160 million / $800 million) × 100 = 20%.
The correct option based on the calculations would be: A) Gross profit: $160 million, Gross profit percentage: 20%.
Now, in the provided self-check question example, to calculate the firm's accounting profit, we need to subtract the explicit costs of labor, capital, and materials from the sales revenue.
This calculation would be $1 million (revenue) - $600,000 (labor) - $150,000 (capital) - $200,000 (materials) = $50,000 in accounting profit.