Final answer:
To complete the inventory purchases budget, you must calculate the total cost of inventory to be purchased using the price and quantity of each item. For the self-check question, the firm's accounting profit is the sales revenue minus all costs, resulting in a profit of $50,000 for that year.
Step-by-step explanation:
To complete the inventory purchases budget for Baird Company, you need to calculate the total cost of inventory that needs to be purchased within a given time period. The calculation can be summarized using the budget formula: Budget = P₁ × Q₁ + P₂ × Q₂, where P represents the price per item and Q represents the quantity of the items to be purchased. When calculating the budget for the purchase of lamps and other light fixtures in the given periods, make sure to use the correct price and quantity for each type of item.
To solve the self-check question regarding the firm's accounting profit, first, we must calculate the total costs and then subtract this amount from the sales revenue. The total costs include labor, capital, and materials.
The firm's accounting profit, in this case, is $50,000, which is the leftover amount after all the costs have been subtracted from the revenue.