Question

Cushman Company had $842,000 in sales. What was the total sales amount?

1) $842,000
2) $842
3) $84,200
4) $8,420

Answer 1

The total sales amount for Cushman Company was $842,000, and the correct answer is option 1. For the self-check question, the firm's accounting profit is calculated by subtracting explicit costs from total revenues, resulting in a profit of $50,000.

Step-by-step explanation:

The Cushman Company had total sales of $842,000. Therefore, the answer to the question 'What was the total sales amount' is option 1, which is $842,000.

To find the firm's accounting profit, we subtract the explicit costs (labor, capital, and materials) from the total revenues. The calculation is as follows:

Accounting profit = Total revenues - Explicit costs

Accounting profit = $1,000,000 - ($600,000 + $150,000 + $200,000)

Accounting profit = $1,000,000 - $950,000

Accounting profit = $50,000