Scenario 13-2
Zach withdrew $400,000 out of his personal savings account and used it to start his new cookie business.The bank account pays 3 percent interest per year.During the first year of his business,Zach sold 6,000 boxes of cookies for $2.50 per box.Also during the first year,the cookie business made monetary outlays of $9,000.You may assume that there is no opportunity cost to Zach's time.
-Refer to Scenario 13-2.Zach's accounting profit for the year was

Question

Quizplus · Accepted Answer

- Zach's revenue from selling cookies is: 6,000 boxes x $2.50/box = $15,000 
- Zach's monetary outlays are: $9,000 
- Zach's accounting profit is revenue minus monetary outlays: $15,000 - $9,000 = $6,000. 
Note that accounting profit only takes into account explicit costs (monetary outlays), and does not include implicit costs such as the opportunity cost of using Zach's personal savings (which is $12,000, the calculated interest of 3% on $400,000).

Scenario 13-2 Zach Withdrew $400,000 Out of His Personal Savings Account and Account