Scenario 13-13
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000.
-Refer to Scenario 13-13. Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. Christine could earn $6,000 per year as a tax preparer. What is the annual accounting profit of her cookie jar business?
A)$36,000
B)$35,950
C)$30,000
D)$29,950

Question

Quizplus · Accepted Answer

The annual accounting profit is calculated by subtracting the explicit costs from the total revenue. Christine's revenue is $90,000, and her explicit costs are $54,000. Therefore, her accounting profit is $90,000 - $54,000 = $36,000.

Scenario 13-13 Christine Is an Artist Who Creates Custom Cookie Jars. Her