Question

Wayman Corporation reports the following amounts in its December 31, 2024, income statement. What are the options for the question?

Answer 1

The accounting profit of a firm can be calculated by subtracting the total expenses from the sales revenue. In this case, the firm's accounting profit is $50,000.

Step-by-step explanation:

The accounting profit of a firm can be calculated by subtracting the total expenses from the sales revenue. In this case, the firm had sales revenue of $1 million and it spent $600,000 on labor, $150,000 on capital, and $200,000 on materials. To find the accounting profit, subtract the total expenses ($600,000 + $150,000 + $200,000 = $950,000) from the sales revenue ($1,000,000):

Accounting Profit = Sales Revenue - Total Expenses

Accounting Profit = $1,000,000 - $950,000

Accounting Profit = $50,000