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If total revenue is Rs 100, explicit costs are Rs. 50, and implicit costs are Rs.30, then accounting profit equals :
- a)Rs 50.
- b)Rs 20
- c)Rs 70
- d)Can’t say
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
If total revenue is Rs 100, explicit costs are Rs. 50, and implicit co...
Explanation:
Accounting profit is the profit after deducting explicit costs from total revenue. Explicit costs are the actual expenses incurred in running a business, such as rent, salaries, supplies, etc. Implicit costs, on the other hand, are the opportunity costs of using the resources for a particular business instead of using them for their next best alternative.
Given that total revenue is Rs. 100, explicit costs are Rs. 50, and implicit costs are Rs. 30, we can calculate accounting profit as follows:
Accounting Profit = Total Revenue - Explicit Costs
Accounting Profit = Rs. 100 - Rs. 50
Accounting Profit = Rs. 50
Therefore, the accounting profit in this case is Rs. 50.
Conclusion:
The accounting profit is the profit after deducting explicit costs from total revenue. In this case, the accounting profit is Rs. 50, as the total revenue is Rs. 100 and the explicit costs are Rs. 50. Implicit costs do not affect accounting profit, but they do affect economic profit, which takes into account both explicit and implicit costs.
Accounting profit is the profit after deducting explicit costs from total revenue. Explicit costs are the actual expenses incurred in running a business, such as rent, salaries, supplies, etc. Implicit costs, on the other hand, are the opportunity costs of using the resources for a particular business instead of using them for their next best alternative.
Given that total revenue is Rs. 100, explicit costs are Rs. 50, and implicit costs are Rs. 30, we can calculate accounting profit as follows:
Accounting Profit = Total Revenue - Explicit Costs
Accounting Profit = Rs. 100 - Rs. 50
Accounting Profit = Rs. 50
Therefore, the accounting profit in this case is Rs. 50.
Conclusion:
The accounting profit is the profit after deducting explicit costs from total revenue. In this case, the accounting profit is Rs. 50, as the total revenue is Rs. 100 and the explicit costs are Rs. 50. Implicit costs do not affect accounting profit, but they do affect economic profit, which takes into account both explicit and implicit costs.
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Community Answer
If total revenue is Rs 100, explicit costs are Rs. 50, and implicit co...
Answer should be B as explicit cost+implicit cost =total cost....
also profit is excess of revenue over expenditure...
therefore ...profit =100-(50+30)
also profit is excess of revenue over expenditure...
therefore ...profit =100-(50+30)
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