d. If Spruce Decor's economic profits were typical of furniture makers in 2019, what would you expect to happen in this industry? Explain.OA. Exit would occur because economic profit is less than accounting profit.OB. Exit would occur because economic profits are negative.OC. Exit would occur because economic costs exceed accounting costs.OD. Entry would occur because economic profits are negative. Consider the revenues and costs in 2019 for Spruce Decor Inc., an Alberta-based furniture company entirely owned by Mr. Harold Buford.Furniture Sales$600,000Catalogue SalosLabour Costs$13,500$345,000$162,000Materials CostsAdvertising CostsDebt-Service Costs$26,000$34,900a. What would accountants detormine Spruce Decor's profits to be in 2019?Spruce Decor's profits in 2019 equal $ 45600b. Suppose Mr. Buford has $375,000 of capital invested in Spruce Decor. Also suppose that oqually risky enterprises ean an 18 percent rate of return on capital.What is the opportunity cost for Mr. Buford's capital?The opportunity cost for Mr. Buford's capital is $ 67500c. What are the economic profits for Spruce Decor in 2019?

Consider the revenues and costs in 2019 for Spruce Decor Inc., an Alberta-based furniture company entirely owned by Mr. Harold Buford. Fumiture Sales $600,000 Catalogue Sales $13,500 $345,000 Labour Costs Matorials Costs $162,000 $26,000 Advertising Costs Debt-Service Costs a. What would accountants detormine Spruce Decor's profits to be in 2019? $34,900 Spruce Decor's profits in 2019 equal $ 45600 b. Suppose Mr. Buford has $375,000 of capitai invested in Spruce Decor. Also suppose that equally risky enterprises eam an 18 percent rate of return on capital. What is the opportunity cost for Mr. Buford's capital? The opportunity cost for Mr. Buford's capital is $67500 c. What are the economic profits for Spruce Decor in 2019?

Consider the revenues and costs in 2019 for Spruce Decor Inc., an Alberta-based furniture company entirely owned by Mr. Harold Buford. Fumiture Sales $600,000 Catalogue Sales $13,500 $345,000 Labour Costs Matorials Costs $162,000 $26,000 Advertising Costs Debt-Service Costs a. What would accountants detormine Spruce Decor's profits to be in 2019? $34,900 Spruce Decor's profits in 2019 equal $ 45600 b. Suppose Mr. Buford has $375,000 of capitai invested in Spruce Decor. Also suppose that equally risky enterprises eam an 18 percent rate of return on capital. What is the opportunity cost for Mr. Buford's capital? The opportunity cost for Mr. Buford's capital is $67500 c. What are the economic profits for Spruce Decor in 2019?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 34P: Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and...

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