Question

Аавьссо| Аавьсах АаВЫС Аавьссс Аав да Normal 1 No Spac... Heading 1 Heading 2 Title Su A- - - - Paragraph Styles Alex quit his job at State University where he earned $45,000 a year to start extreme gaming software business To start the business, he cashed in $100,000 in bonds that was earning him 10 percent interest annually to buy equipment. His forgone entrepreneurial income was $5,000 a year. In the first year, the firm sold 11,000 units of software at $75 for each unit of the $75 per unit, $55 goes for the costs of production, packaging, marketing. employee wages and benefits, and rent on a building 4. Refer to the above information. How much accounting profit did Alex make in the first year were. (points)

Answer 1

Revenue = No. of units sold * Price

Explicit cost = No. of unit sold * per unit cost

Accounting profit = Revenue - Explicit cost

= 11000 * 75 - 11000 * 55

= 220000