How much are burton cummings explicit costs per month

Assignment Help Microeconomics

Reference no: EM131774796

Question: When Burton Cummings graduated with honors from the Canadian Trucking Academy, his father gave him a exist350,000 tractor-trailer rig. Recently, Burton was boasting to some fellow truckers that his revenues were typically exist25,000 per month, while his operating costs (fuel, maintenance, and depreciation) amounted to only exist18,000 per month. Tractor-trailer rigs identical to Burton's rig rent for exist15,000 per month. If Burton was driving trucks for one of the competing trucking firms, he would earn exist5,000 per month.

a. How much are Burton Cummings's explicit costs per month? How much are his implicit costs per month?

b. What is the dollar amount of the opportunity cost of the resources used by Burton Cummings each month?

c. Burton is proud of the fact that he is generating a net cash flow of exist7,000 (= exist25,000 -exist18,000) per month, since he would be earning only exist5,000 per month if he were working for a trucking firm. What advice would you give Burton Cummings? WHY?

Reference no: EM131774796

Questions Cloud

What is the amount of gabriel and ediths amt adjustment : What is the amount of Gabriel and Edith's AMT adjustment for itemized deductions in 2013

Calculate the profit maximizing output : Bud Owen operates Bud's Package Store in a small college town. Bud sells six packs of beer for off-premises consumption.

Product and customer profitability analysis : PWC Systems, Inc., makes jet skis and other personal watercraft for sale through specialty sporting goods stores.

Describe the three sources of tax law and the importance : Describe the three sources of tax law and the importance of each. Which source do you think is the most important, and why

How much are burton cummings explicit costs per month : When Burton Cummings graduated with honors from the Canadian Trucking Academy, his father gave him a exist350,000 tractor-trailer rig.

What do we mean by a standard cost : 1. What do we mean by a "standard cost"? Any examples that you can think of for any type of business?

Generate a spring damper validation of the model : MP 3680 Design changes to the present configuration and report recommendations for the requirements - establish a working model in SimMultibody.

Non-profit or government organization : So the next question is, what about departments within a non-profit or government organization? Any thoughts on this issue?

Determining the ddb switching to sl method : A business equipment used for the manufacture of commercial goods can be purchased for $30,000. This asset is expected to be sold after 4 years for $6,000.

User Account

All Pages