Scenario 12-16
A certain firm produces and sells staplers.Last year,it produced 7,000 staplers and sold each stapler for $6.In producing the 7,000 staplers,it incurred variable costs of $28,000 and a total cost of $45,000.
-Refer to Scenario 12-16.Suppose the owner of the business had an offer to work for another firm for $25,000.The firm's accounting profit for the year was
A) $-28,000.
B) $-25,000
C) $-3,000.
D) $17,000.

Question

Quizplus · Accepted Answer

The firm's revenue from selling 7,000 staplers is 7,000 x $6 = $42,000.
To find the accounting profit, we need to subtract the total cost from the revenue: 
Accounting profit = Revenue - Total cost
= $42,000 - $45,000 = $-3,000
This means that the firm had a net loss of $3,000 for the year. If the owner had accepted the offer to work for another firm, it would not have affected the firm's accounting profit.

Scenario 12-16 A Certain Firm Produces and Sells Staplers.Last Year,it Produced 7,000