Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000. %3D %3D %3D %3D Rogue's gross profit is equal to

Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000. %3D %3D %3D %3D Rogue's gross profit is equal to

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter21: Costs And The Supply Of Goods

Section: Chapter Questions

Problem 17CQ

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Howard Bowen is a large-scale cotton farmer. The land and machinery he owns has a current market value of $10 million. Bowen owes his local bank $7 million. Last year Bowen sold $9 million worth of cotton. His variable operating costs were $7 million; accounting depreciation was $40,000, although the actual decline in value of Bowen's machinery was $60,000 last year. Bowen paid himself a salary of $50,000, which is not considered part of his variable operating costs. Interest on his bank loan was $400,000. If Bowen worked for another farmer or a local manufacturer, his annual income would be about $30,000. Bowen can invest any funds that would be derived if the farm were sold to earn 10% annually. (Ignore taxes.) What is Bowen's accounting profit? $1,210,000.00 $1,550,000 $1,560,000 $1,220,000.00 What is Bowen's economic profit? $1,210,000.00 $1,560,000 $1,550,000 $1,220,000.00