Ask Question
11 November, 23:22

Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients, the bottles, and the labels was $700. In addition, it took her 20 hours to make the ketchup and to do so she took time off from a job that paid her $20 per hour. Instructions: Enter your answers as whole numbers.

+1
Answers (1)
  1. 11 November, 23:42
    0
    Accounting profit = $300

    Economic profit = $-100

    Explanation:

    given data

    sells = 100 bottles

    selling cost = $10 each

    labels = $700

    make the ketchup = 20 hours

    paid = $20 per hour

    to find out

    accounting profit and economic profit

    solution

    we get here Accounting profit that is express as

    Accounting profit = Total Revenue - Total cost ... 1

    here Total revenue is = price * quantity

    so Total revenue = 100 * $10

    Total revenue = $1,000

    so here put value in equation 1 we get

    Accounting profit = $1000 - $700

    Accounting profit = $300

    so here

    we get now Economic profit that is

    Economic profit = accounting profit - implicit cost or opportunity cost ... 2

    here Implicit cost is

    Implicit cost = $20 * 20

    Implicit cost = $400

    put value in equation 2 we get

    Economic profit = $300 - $400

    Economic profit = $-100
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients, the bottles, and the labels was $700. In addition, ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers