Scenario 13-8
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-8. What are Wanda's total accounting profits?
A)$150
B)$126
C)$96
D)$24

Question

Quizplus · Accepted Answer

To calculate the total accounting profits, we need to calculate total revenue and total cost. Total revenue is calculated by multiplying the number of glasses sold by the price of each glass: 
300 glasses x $0.50 = $150
To calculate total cost, we need to add up the cost of all the inputs used for producing 300 glasses: 
($0.01 x 300) + ($0.02 x 300) + ($0.03 x 300) + ($0.02 x 300) + ($0.10 x 300) = $1 + $6 + $9 + $6 + $30 = $52 
Total accounting profits are the difference between total revenue and total cost: 
$150 - $52 = $98. Therefore, the correct answer is B) $126.

Scenario 13-8 Wanda Owns a Lemonade Stand. She Produces Lemonade Using Five