Lauren is the owner of a bakery.Last year,her total revenue was $145,000,her rent was $12,000,her labor costs were $65,000,and her overhead expenses were $15,000.From this information,we know that her accountant,who does not consider implicit costs,would tell her that profit was:

Question

Quizplus · Accepted Answer

To calculate profit, we need to subtract all the expenses (explicit costs) from the total revenue.

Profit = Total Revenue - (Rent + Labor Costs + Overhead Expenses)
Profit = $145,000 - ($12,000 + $65,000 + $15,000)
Profit = $145,000 - $92,000
Profit = $53,000

Therefore, Lauren's profit was $53,000 according to her accountant who only considers explicit costs.

Lauren Is the Owner of a Bakery