Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jill Johnson s dream was always to open her own pizza restaurant. Finally, she decided to take the plunge. She quit her job, and took

Jill Johnsons dream was always to open her own pizza restaurant. Finally, she decided to take the

plunge. She quit her job, and took $20,000 of her retirement savings to start her restaurant. She leased

space, purchased pizza ovens, hired workers, and started making pizza. Her total sales in year 1 were

$160,000.

Pizza dough, tomato sauce, other ingredients $20,000

Wages 48,000

Interest payments on loan to buy pizza ovens 10,000

Electricity and other utilities 6,000

Lease payment for store 24,000

Foregone salary 30,000

Foregone interest 3,000

Depreciation 10,000

What is her accounting profit? _______________

What is her economic profit?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To calculate Jill Johnsons accounting profit we need to subtract her total expenses from her total s... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting for the Hospitality Industry

Authors: Lea R. Dopson, David K. Hayes

2nd edition

978-1-119-2996, 1119299659, 978-1119386223

More Books

Students also viewed these Economics questions

Question

MIPs / MRCs not scheduled that arerequired are called...

Answered: 1 week ago

Question

Use the 689599.7 rule to determine Pr(Z Answered: 1 week ago

Answered: 1 week ago

Question

Fill in these blanks: Z ~ N(____, ____)

Answered: 1 week ago