The Table Below Provides the Annual Revenues and Costs for a Family-Owned

question 52

Multiple Choice

The table below provides the annual revenues and costs for a family-owned firm producing catered meals.
TABLE 7-1
-Refer to Table 7-1.To an accountant,this family-owned catering company is earning ________.To an economist,the same firm is earning ________.

• A)zero profit; economic losses
• B)zero profit; normal profits
• C)positive profits; economic losses
• D)economic profits; economic profits
• E)economic profits; economic losses

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Definitions:

Contribution Format

is an income statement format that separates fixed and variable costs, highlighting the contribution margin.

Net Operating Income

The profit generated from a company's operational activities after subtracting operating expenses from revenue.

Target Profit

The amount of net income that a company aims to achieve within a specific time frame.

Margin of Safety Percentage

The ratio that shows how much sales can decline before a business reaches its break-even point, expressed as a percentage.