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revenues per month 27,000 costs: erchandise sold $ 17,000 cashier, stock, and delivery help 2,500 utilities 800 700 costs $21,000 profit (revenue minus explicit costs) $ 6,000 costs: pwner-manager, 300 hours @ $10 per hour $ 3,000 inventory investment, 10% per year on 1,000 costs $ 4,000 rofit (revenue minus all costs) $ 2,000

revenues per month 27,000 costs: erchandise sold $ 17,000 cashier, stock, and delivery help 2,500 utilities 800 700 costs $21,000 profit (revenue minus explicit costs) $ 6,000 costs: pwner-manager, 300 hours @ $10 per hour $ 3,000 inventory investment, 10% per year on 1,000 costs $ 4,000 rofit (revenue minus all costs) $ 2,000

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.1IP
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Refer to the table below to answer two questions. 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 Тахes 700 Total explicit costs $21,000 Accounting profit (revenue minus explicit costs) $ 6,000 less implicit costs: $ 3,000 Wages of owner-manager, 300 hours @ $10 per hour Return on inventory investment, 10% per year on $120,000 1,000 $ 4,000 $ 2,000 Total implicit costs Economic profit (revenue minus all costs)
Transcribed Image Text:Refer to the table below to answer two questions. 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 Тахes 700 Total explicit costs $21,000 Accounting profit (revenue minus explicit costs) $ 6,000 less implicit costs: $ 3,000 Wages of owner-manager, 300 hours @ $10 per hour Return on inventory investment, 10% per year on $120,000 1,000 $ 4,000 $ 2,000 Total implicit costs Economic profit (revenue minus all costs)
If the owner of the drugstore hired a manager for $10 an hour to take his place, how much of a change would show up in: Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. Accounting profits per month? $ 3,000 8 b. Economic profits per month? $ 2000
Transcribed Image Text:If the owner of the drugstore hired a manager for $10 an hour to take his place, how much of a change would show up in: Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. Accounting profits per month? $ 3,000 8 b. Economic profits per month? $ 2000
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