Monthly economic profit of drugstore

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Reference no: EM131169195

Refer to the table below. The table shows the monthly economic profit of a drugstore. Total (gross) revenues per month $ 27,000 less explicit costs: Cost of merchandise sold $17,000 Wages to cashier, stock, and delivery help 2,500 Rent and utilities 800 Taxes 700 Total explicit costs -------------------------------------------------------------------------------- $21,000 Accounting profit (revenue minus explicit costs) $6,000 less implicit costs: Wages of owner-manager, 300 hours @ $10 per hour $3,000 Return on inventory, 10% per year on $120,000 1,000 Total implicit costs -------------------------------------------------------------------------------- $4,000 Economic profit (revenue minus all costs) $2,000 If the owner of the drugstore hired a manager for $15 an hour to take his place, how much of a change would show up in: Instructions: Enter your responses as a whole number. Indicate a negative response with a (-) negative sign. (a) Accounting profits per month? $ (b) Economic profits per month? $

Reference no: EM131169195

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