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12 January, 01:29

Tanesha sells homemade candles over the Internet. Her annual revenue is $64,000 per year, the explicit costs of her business are $17,000, and the opportunity costs of her business are $22,000. What is her accounting profit

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  1. 12 January, 05:15
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    The answer is $47,000

    Explanation:

    Accounting profit profit doesn't consider opportunity cost. So the value for opportunity cost will be left out. It is Economic profit that considers opportunity cost.

    Accounting profit = revenue - cost (explicit cost which is all cost involved in directly running the business e. g cost of sales, electricity cost, wage etc.)

    Revenue = $64,000

    Explicit cost = $17,000

    Therefore, Accounting profit is

    $64,000 - $17,000

    =$47,000
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