Question
Refer to the table below. The table below shows the monthly economic profit of a drugstore. Total (gross) revenues per month $ 27,000 less explicit
Refer to the table below. The table below shows the monthly economic profit of a drugstore. Total (gross) revenues per month $ 27,000 less explicit costs: Cost of merchandise sold $17,000 Wages to cashier, stock, and delivery help 2,500 Rent and utilities 800 Taxes 700 Total explicit costs $21,000 Accounting profit (revenue minus explicit costs) $6,000 less implicit costs: Wages of owner-manager, 300 hours @ $10 per hour $3,000 Return on inventory, 10% per year on $120,000 1,000 Total implicit costs $4,000 Economic profit (revenue minus all costs) $2,000 If the owner of the drugstore hired a manager for $15 an hour to take his place, how much of a change would show up in: Instructions: Enter your responses as a whole number. Indicate a negative response with a (-) negative sign. (a) Accounting profits per month? $ (b) Economic profits per month? $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started