Use the Following Scenario to Answer the Following Questions

question 127

Multiple Choice

Use the following scenario to answer the following questions:
Babak owns a sports practice facility called Boston Batting Cages in Boston,Massachusetts.During the first year of operation,Boston Batting Cages incurred many costs.In that year,Babak spent $5,000 on labor,$2,000 on maintenance,and $1,000 on electricity.Babak took out a loan to open his business,in which he would have earned $1,500,and his previous job,which he could get back at any time,paid him $50,000.
-If Boston Batting Cages received $80,000 in revenues,what were the accounting profits?

• A) $20,500
• B) $72,000
• C) $51,500
• D) $80,000
• E) $50,000

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Definitions:

Fixed Price Contract

A contract agreement where the service or product is provided at a predetermined and unchangeable price.

Scope Of Work

A detailed description of the specific tasks, activities, deliverables, and timelines that a project or contract will include.

Qualified Bidders

Companies or individuals that meet specific criteria allowing them to participate in a bidding process, typically for contracts or procurement.

Unique Product

A product that offers distinctive features or attributes not commonly found in other products in the market.