Business Economics and Profit Analysis

What was the total revenue from sales at Brady Advantage in 2013?

What were the total operating costs and expenses incurred by Brady Advantage in 2013?

What was the net income of Brady Advantage in 2013?

What is the opportunity cost of Terry Brady's personal savings that he used to fund the store?

What is the total economic cost incurred by Brady Advantage in 2013 if the accounting profit is $72,000?

Which amount represents the income from operations for Brady Advantage?

What were the selling expenses incurred by Brady Advantage in 2013?

Did Terry Brady increase his wealth by quitting his job based on the economic profit calculation?

Brady Advantage

Terry Brady started Brady Advantage in 2013, a sporting goods store in Terre Haute, Indiana
Brady Advantage is strategically located between St. Louis and Indianapolis
Brady Advantage generated $210,000 in revenue and $100,000 in operating expenses resulting in a $110,000 operating income
Brady Advantage incurred $14,000 in interest on a bank loan, $8,000 in business start-up costs, and $16,000 in income taxes
Brady Advantage generated $72,000 in net income in 2013
Before starting Brady Advantage, Terry Brady earned $45,000 per year as a football coach
$50,000 of Brady's personal savings were used to fund Brady Advantage which was earning 2% interest annually

Costs & Profit

Explicit costs are expenses incurred by a company and paid to outside suppliers/vendors
Implicit costs are the opportunity costs associated with using owner-supplied resources
- Opportunity cost is what is given up when making a decision
Economic cost is the sum of explicit and implicit costs
Accounting profit only accounts for explicit costs
Economic profit accounts for both explicit and implicit costs.

This quiz covers key concepts in business economics, including explicit and implicit costs, profitability analysis, and the financial performance of Brady Advantage. Understand how operating income, net income, and opportunity costs impact business decisions and success.