12/3/2017 11:00PM019/16 Print Calculator Gradebook Question 4 of 16 Available Fr

Question

12/3/2017 11:00PM019/16 Print Calculator Gradebook Question 4 of 16 Available From Due Date Poires Pussible: Grade Category Description: Policies sapling Learning Reggie owns and operates a cheese shop in the village of Somerset While Reggie has a degree in mechanical engineering and could easily go to work for his brother's company earning $80,000 a year his true passion is for cheese, Below is a list of Reggie's expenses from 2010 Please use the information provided to answer the questions that follow. You can oexyou Revenue from 2010 Rent Equipment Supplies S 95,000 $ 19,000 7.000 S 3,000 You can view soba give up on any qu You can keep tryir you get e right or You lose 5e of the answer in your qu attempt at thet en O e Textbooix What is Reggie's accounting profit? What is Reggie's economic profit? O Help With This T Number Number $ 41000 $ 15000 Technical Supp There is a hint available!

Explanation / Answer

Solution:

Reggie Accounting Profit: $66,000

Reggie Economic Profit: -$14,000 (economic loss)

Reggie Accounting Profit = Revenue - Rent - Supplies - Equipment = $95,000 - $19,000 - $7,000 - $3,000 = $66,000

Reggie Economic Profit = Accounting Profit - Salary foregone = $66,000 - $80,000 = -$14,000

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