Calculate the accounting and economics profits for the firm

Assignment Help Business Economics

Reference no: EM131805817

Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000.

Calculate the Accounting and Economics profits for the firm.

Reference no: EM131805817

Questions Cloud

Maximum output that can be produced : The firm would like to know the maximum output that can be produced for $9,000. Find the combination of inputs that maximizes output for a cost of $9,000

Combination of inputs that maximizes output : The combination of inputs that maximizes output for a cost of $9,000 is: K = units and L = units, and the amount of output that can be produced is units.

What would be net saving or costs to outsource to nusteel : The Radial Tyre manufacturing company currently makes inner mesh for use in finished tyres. What would be the net saving or costs to outsource to NuSteel?

Complete the comparative retained earnings statements : Complete the comparative retained earnings statements for Madrasa Inc. for 2009 and 2010. The company had retained earnings of $200,000 at December 31, 2008

Calculate the accounting and economics profits for the firm : He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000.

Discuss what is the correcting journal entry : If no correcting journal entry is recorded, how are the 20X0 income statement and balance sheet, respectively

Draw the indifference curves for ron and dave : Currently, there are 10 onions and 5 hamburger patties produced in the economy and Ron has 6 onions and 2 hamburger patties.

Draw an edgeworth box diagram : (a) Draw an Edgeworth Box diagram summarising the above information. (b) Draw the indifference curves for Ron and Dave in the Edgeworth Box.

Maximize economic profit : Archibald's Tattoos is a perfect competition firm. The firm's costs are shown in the table above. If the market price for a tattoo

User Account

All Pages