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Accounting profit is explained by taking a simple example. Let us suppose, the total
revenue of a firm from the sale of goods in 2018 is $90000. Its costs on the purchase
of raw material, payment of wages and other utilities i.e., explicit costs are $35000.
The firms accounting profit will be $55000.
Total sales revenue.............$90000
Cost of raw material = $15000
Wages to labor and other utilities = $20000
Accounting profit = $90000 - ($15000 + $20000) = $55000
(Total Revenue - Explicit Cost)