1. Gomez runs a small pottery firm. He hires one helper at

$12,000 per year, pays annual rent of $5000 for his shop, and spends $20,000 per year on materials. He has

$40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him

$4000 per year if alternatively invested. He has been offered

$15,000 per year to work as a potter for a competitor.

He estimates his entrepreneurial talents are worth $3000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit andtheeconomicpr ofitf orGome z’s potteryfirm. LO2