As the manager of a jeans manufacturing company, you have been tasked to determine the financial well-being of your company.

The accounting department has worked up the following figures for the year just ended:

Price per pair of jeans $35.00

Number of pairs of jeans sold 170,000 pair

Utilities expense $245,000

Telephone expense $15,000

Accounting depreciation $38,000

Wages paid to employees $270,000

Materials expense $380,000

Total of owner's money invested in the company $1,000,000

Economic depreciation $45,000

Current market interest rate 2 percent

Owner's normal profit estimate $60,000

Forgone job owner could have worked at Levi's $75,000

a) Calculate the accounting profit for the business.

b) Calculate the economic profit for the business.