The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers = $120,000
Utilities (electricity,water,disposal)costs = $8,000
Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000
Entrepreneur's forgone interest on personal funds used to finance the business = $6,000
Refer to the data.Creamy Crisp's economic profit is:

Question

Quizplus · Accepted Answer

To calculate the economic profit, we have to deduct all the opportunity costs of the entrepreneur from the revenue. 
Revenue = $380,000
Opportunity Cost = $50,000 + $22,000 + $120,000 + $8,000 + $80,000 + $6,000
Opportunity Cost = $286,000
Economic Profit = Revenue - Opportunity Cost
Economic Profit = $380,000 - $286,000
Economic Profit = $94,000
Therefore, the economic profit of Creamy Crisp Donut Company is $94,000. The correct answer is D.

The Following Is Cost Information for the Creamy Crisp Donut