Why accounting profit is generally much higher than economic

Assignment Help Managerial Accounting
Reference no: EM132967762

Problem 1: Explain why accounting profit is generally much higher than economic profit. How do you convince your friend who owns and manages a small retail outlet (which forms part of an adjoining building to his/her own house and hence pays no rent for the shop) that his/her adoption of economic profit might be a much better reflection of the businesses finances than the accounting profit he/she is currently using?

Reference no: EM132967762

Questions Cloud

What type of report would you issue : The company refuses to disclose this related-party transaction in the footnotes. What type of report would you issue? Explain
Explain annual cost of security : The government requires a program to compute the annual cost of running an embassy in a foreign country. The following values for each embassy are entered: coun
Create the journal entries to record overhead incurred : The Bellevue Company uses a standard,Prepare the journal entries to record overhead incurred (you should credit "various accounts") and the overhead variances.
How much is the sale revenue recognized by the SME : An SME sell goods in exchange for a P340,000 note receivable in two years' time. How much is the sale revenue recognized by the SME
Why accounting profit is generally much higher than economic : Why accounting profit is generally much higher than economic profit. How do you convince your friend who owns and manages a small retail outlet
Discuss the ethical implications of the proposal : Discuss the ethical implications of this proposal from the VP of Operations. 2020 was not a good year for Company x and 2021 started quite slow with the busines
What is your estimate of the firm net income : What is your estimate of the firm's net income (after taxes) for the coming year? Complete the pro-forma income statement
Type of servant leader behaviors : "I have to recommend strongly that you stay on the planc," the attendant said, sternly. But then, with a smile, she added, "But I can get off. The plane won't l
Does the investment decision change : Does the investment decision change? If the oil-well project justifies an extra 4 percent premium over the normal cost of capital because of its riskiness

Reviews

Write a Review

Managerial Accounting Questions & Answers

  What do observe in the linear trends

Discuss What are the trends on a common-size basis? What would be your next steps in completing a thorough analysis of the trends?

  Analyse the practical use of accounting information

Evaluate the role of management accounting systems and the provision of accounting information in the innovation process of these two companies

  Compute the sleighs net present value

Compute the sleighs net present value. Would you recommend that Nick buy the sleigh? Jolly Old St. Nick Inc. is considering purchasing an electric sleigh

  Create and share the plan you develop using the AIDA model

Your office manager has asked all office employees to submit an idea for a community event. Create and share the plan you develop using the AIDA model

  Prepare a complete set of financial statements as of january

Prepare a complete set of financial statements as of January 31, 2012 and prepare the statement of cash flows under the direct and indirect

  What price would expect the stock to trade immediately

If the company decides on a 2-for-1 split, at what price would you expect the stock to trade immediately after the split goes into effect?

  Prepare a revised income statement for daniels tool

For the year ended December 31, 2016, prepare a revised income statement for Daniels Tool & Die Corporation using the variable-costing method.

  Evaluate cost formula that expresses the behaviour of yang

Evaluate the cost formula that expresses the behaviour of Yang's total costs. The relevant range of operations is between 2,500 units and 10,000 units of Yin.

  Overall cost and business outcome of coachbuilders

Why do you think standard costing is the most widely used costing system in the world in manufacturing firms, even though more sophisticated systems might be available? Discuss -

  Find what is the predetermined manufacturing overhead rate

The cost of the direct materials that can be used to manufacture the table are as follows. What is the predetermined manufacturing overhead rate?

  What would the salvage value have to be a good investment

There will be some salvage value for the equipment, but she isn't sure how much. What would the salvage value have to be for this to be a good investment?

  Prepare schedule of costs of goods manufactured for month

Prepare a schedule of costs of goods manufactured for the month ended 30 April 2020. Show the actual manufacturing overhead

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd