What Is Economic Profit

question 190

Multiple Choice

What is economic profit?

• A)gross revenue minus explicit costs
• B)gross revenue minus implicit costs
• C)gross revenue minus explicit and implicit costs
• D)the same as accounting profit

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Definitions:

Cost of Goods

The total cost of manufacturing or acquiring a product or service that is sold to customers.

Machine-Hour

A measure of production or operation time where costs are allocated based on the number of hours a machine is operated.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead to individual jobs.

Machine-Hours

A unit of measurement for production capacity, indicating the total number of hours that machinery is operational during a given period.