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True or False. Accounting profit equals sales revenue minus explicit costs?
MrAndyProcter
True
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∙ 8y ago
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Why accounting profit is higher than economic profit?
First of all, we need to understand what is explicit cost and implicit cost. Explicit cost mean real expenses, while implicit cost mean opportunity cost. In accounting profit, we only minus explicit cost, while in economic profit we minus explicit cost and implicit cost. therefore accounting profit is higher than economic profit.
Is Economic profit is found by subtracting accounting costs from total revenue?
yes
What happens when marginal revenue equals marginal cost?
profit is maximized
A company is maximizing profit when marginal revenue?
A company maximizes profits when marginal revenue equals marginal costs.
Policies on profit maximization?
Profit maximization is a short run or long run process which a firm determines the price and output level that returns the greatest profit. The total revenue-total cost perspective is based on the fact that profit equals revenue minus cost and focuses on maximizing this difference.
Why accounting profit is higher than economic profit?
First of all, we need to understand what is explicit cost and implicit cost. Explicit cost mean real expenses, while implicit cost mean opportunity cost. In accounting profit, we only minus explicit cost, while in economic profit we minus explicit cost and implicit cost. therefore accounting profit is higher than economic profit.
Difference between accounting profit and economist's profit?
The accounting profit is the difference between total revenue and total cost excluding the economic cost (opportunity cost) of owner-supplied resources such as time and capital. At the other hand, In the economic cost, we include the opportunity cost in our calculations. · When total revenue exceeds both explicit and implicit costs, the firm earns economic profit. · Economic profit is smaller than accounting profit Another answer culed be: Economic Profit is slightly different than accounting profit, which merely the firm's total revenues minus its total costs. Economic profit is defined as total revenues minus total operating costs minus opportunity cost. Opportunity cost is defined as the cost of the profits you forgo by not doing another activity. For example the opportunity costs of opening a lemonade stand is equal to the difference between the accounting profits of the lemonade stand minus the accounting profits of a more profitable hot dog stand.
What is mean by revenue in accounting?
revenue mean the grows of stock when you sale out the item or is the profit of income
In accounting profit is the difference between what?
difference between revenue and costs
Is Economic profit is found by subtracting accounting costs from total revenue?
yes
Economic profit is found by subtracting accounting costs from total revenue?
True
What is the formula to calculate profit?
A simple profit formula reconciles revenue to losses and expenses. Profit equals the total revenue subtracted by losses and expenses.
Revenue less expenses equals?
Net income or Profit
Cost of goods sold plus gross profit equals?
Cost of goods plus gross profit margin equals to total sales revenue of firm.
What happens when marginal revenue equals marginal cost?
profit is maximized
How does cost affect revenue and profitability?
There could be a variety of answers to this question, depending on what perspectives you use to answer them. ( accounting, economics etc ). Using my understanding of Economics, it's important to first have an equation to link all these variables. Profit = Revenue - Cost. This is called the profit equation, where profit equals revenue minus cost. Revenue is the sales that you obtain from day to day sales. It's expressed in a monetary value. For example, if I am able to sell 10 hotdogs today at US dollar 5 for each hotdog, then my revenue for the day will be US Dollars 50. However this is my revenue and not my profit, as I incurred cost while earning this revenue. Lets say the cost of this business is US Dollars 3. If this is the case the profit will be 50 - 3 which equals 47. Hence profit is 47. This equation shows that an increase in cost, can reduce the profit. At some instances, the increase in cost can increase revenue, depending on the price that you are selling and also the quantity sold. This will depend on how large the increase is. Generally if Revenue is more than cost, there is profit, while if Cost is more than revenue that is lost. If Revenue equals Cost, there is break even. This means that the profit is zero. Hope this helps. (cheong@bgymail.gd.cn)
A company is maximizing profit when marginal revenue?
A company maximizes profits when marginal revenue equals marginal costs.
