Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is accounting profit for Tommy's Teddy Bears?

Question

Quizplus · Accepted Answer

Accounting profit is calculated by subtracting explicit costs from revenues. Therefore, accounting profit for Tommy's Teddy Bears is $600,000 - $300,000 = $300,000. Implicit costs are not considered in accounting profit calculations. The information about net worth is not relevant to calculating accounting profit.

Tommy's Teddy Bears Incurs $300,000 Per Year in Explicit Costs