Essentials of Economics
11th Edition
ISBN: 9781260520910
Author: SCHILLER, Bradley
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 5, Problem 7P
To determine
(a)
The total accounting cost from the figures mentioned in the question.
To determine
(b)
The total economic cost with the figures mentioned in the question.
To determine
(c)
The change in the economic and the accounting cost of the company if the company would have sold the building and then leased it back.
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Suppose a company incurs the following costs: labor, $2,000; equipment, $600; and materials, $200. The company owns the
building, so it doesn't have to pay the usual $900 in rent.
Instructions: Enter your responses as a whole number.
a. What is the total accounting cost?
$
b. What is the total economic cost?
$
c. If the company sold the building and then leased it back, what would be the change in
1. accounting costs?
$
2. economic costs?
$
Q Search
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Suppose a company incurs the following costs:
Labor $5,000
Equipment $3,000
Materials $1,000
It owns the building, so it doesn’t have to pay the usual $2,000 in rent.
(a) What is the total economic cost?
(b) How would accounting and economic costs change if the company sold the building and then leased it back?
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