Business, 24.06.2020 04:01 mat1413

Gomez runs a small pottery firm. He hires one helper at $16,500 per year, pays annual rent of $6,000 for his shop, and spends $22,500 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 $5,000 per year if alternatively invested. He has been offered $19,500 per year to work as a potter for a competitor. He estimates he could use his talents to earn an additional $5,500 per year in consulting fees if he were working full time as a potter. Total annual revenue from pottery sales is $89,000.Calculate the accounting profit and the economic profit for Gomez's pottery firm. Accounting profit = ?
Economic profit = ?

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Gomez runs a small pottery firm. He hires one helper at $16,500 per year, pays annual rent of $6,000...

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