Scenario 13-13 Christine Is an Artist Who Creates Custom Cookie Jars. Her

question 87

Multiple Choice

Scenario 13-13
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000.
-Refer to Scenario 13-13. Christine could earn $6,000 per year preparing taxes. In calculating the economic profit of her cookie jar business, the $6,000 that Christine gives up is counted as part of her business's

• A)total revenue.
• B)explicit costs.
• C)implicit costs.
• D)marginal costs.

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Definitions:

Stockholders' Equity

Stockholders' equity represents the owners' equity invested in a company, inclusive of retained earnings and contributed capital, showing the residual assets available to shareholders after debts are settled.

Treasury Stock

Treasury stock includes shares that have been originally issued and then bought back by the issuing corporation, thereby decreasing the total number of outstanding shares available on the public market.

Cumulative

Describes an amount that has accumulated over time, often referring to the total up to a particular point.

Capital Stock

The total amount of a company's shares authorized and issued to shareholders, representing the primary source of equity financing.