Francis owns a dog grooming shop. Francis owns the building where the shop is located. Her annual revenue and operating expenses are as follows:
Revenues $224,000
Supplies $48,000
Utilities $6,000
Employee salaries . $72,000
Francis' salary . $84,000
Francis is considering closing the shop to become a professional dog trainer. If she makes this change, she would make $88,000 a year and her cousin has offered to rent the building for $30,000 annually
- What is the accounting cost for the shop?
- What is the economic cost for the shop? Why is it different from accounting cost?
- What is the economic profit for the shop?