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Jill resigns from her job, at which she was earning $50,000 per year, and uses her $100,000 savings, on which she was earning 5 percent interest, to start a business. In the first year, she earns revenue of $150,000, and her costs are as follows.
Rent $25,000
Utilities $12,000
Wages $30,000
Materials $20,000
A. Calculate Jill's accounting profit.
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The solution shows exactly how to calculate accounting profit.
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Jill's accounting profit:
Revenues 150,000
Less:
Rent ...
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