Annual revenue from pottery sales

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Reference no: EM13912387

Gomez runs a small pottery. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment(pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000.(2 points)

Calculate accounting profit for Gomez's pottery firm.

Calculate economic profit for Gomez's pottery firm.

Reference no: EM13912387

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