Veruca sells therapeutic bath salts on the Internet. Her annual revenue is $52,000 per year, the explicit costs of her business are $14,000, and the opportunity costs of her business are $17,000 per year. What is her accounting profit? A. $14,000 B. $21,000 C. $31,000 D. $38,000

Question

Graham Woodward

Business

18 February, 18:35

Veruca sells therapeutic bath salts on the Internet. Her annual revenue is $52,000 per year, the explicit costs of her business are $14,000, and the opportunity costs of her business are $17,000 per year. What is her accounting profit? A. $14,000 B. $21,000 C. $31,000 D. $38,000

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Emmett · Answer 1

D. $38,000

Explanation:

The formula to compute the accounting profit is shown below:

Accounting profit = Annual revenue - Explicit cost

= $52,000 - $14,000

= $38,000

It shows a relationship between the annual revenue and the explicit cost. The difference between these two is known as accounting profit.