Harvey develops gaming apps from home instead of working as an engineer and earning $50,000 a year.He has invested $20,000 to upgrade to the hardware that he needs and estimates his expenses at $17,000 a year.Downloads generated $130,000 in revenue during the first year.What is his accounting profit?
A)$37,000
B)$50,000
C)$43,000
D)$93,000
E)$130,000

Question

Quizplus · Accepted Answer

Accounting profit is calculated as total revenue minus explicit costs. Harvey's revenue is $130,000, and his explicit costs include the $20,000 investment in hardware and $17,000 in annual expenses, totaling $37,000. Subtracting these costs from the revenue gives an accounting profit of $130,000 - $37,000 = $93,000.

Harvey Develops Gaming Apps from Home Instead of Working as an Engineer