**Megan's Business Costs: A Case Study**Megan transitioned from working at a local pizzeria, where she earned $17,000 annually, to starting her own deli. In the past year, her financial commitments included:- Monthly rent: $4,000- Employee payroll: $4,500 per month- Supplies: $1,500 per monthShe initially intended to sell furniture worth $2,500 but opted to use it in her new deli instead. Her total revenue for the year amounted to $150,000. To evaluate her business expenses, Megan consulted both an accountant and an economist.**Options for Annual Cost Calculation:**- **Option 1:** Accountant estimates her cost to be $120,000; Economist estimates $139,500.- **Option 2:** Accountant estimates her cost to be $139,500; Economist estimates $120,000.- **Option 3:** Accountant estimates her cost to be $10,000; Economist estimates $29,500.- **Option 4:** Accountant estimates her cost to be $30,000; Economist estimates $10,500.This scenario invites exploration of how different professionals might assess business costs, taking into account numerous factors such as explicit expenses and opportunity costs.

The study and analysis of commercial financial issues using abstract economic concepts and…

Megan used to work at the local pizzeria for $17,000 per year but quit in order to start her own deli. Last year, she paid $4,000 rent each month, $4,500 for employee payroll each month, and $1,500 for supplies each month. She was planning on selling $2,500 worth of furniture but ended up bringing the furniture to her new deli. She had total revenue of $150,000. She asked an accountant and an economist to calculate her annual costs. O Accountant says cost is $120,000, and economist says her cost is $139,500. Accountant says cost is $139,500, and economist says her cost is $120,000. O Accountant says cost is $10,000, and economist says her cost is $29,500. O Accountant says cost is $30,000, and economist says her cost is $10,500.

Megan used to work at the local pizzeria for $17,000 per year but quit in order to start her own deli. Last year, she paid $4,000 rent each month, $4,500 for employee payroll each month, and $1,500 for supplies each month. She was planning on selling $2,500 worth of furniture but ended up bringing the furniture to her new deli. She had total revenue of $150,000. She asked an accountant and an economist to calculate her annual costs. O Accountant says cost is $120,000, and economist says her cost is $139,500. Accountant says cost is $139,500, and economist says her cost is $120,000. O Accountant says cost is $10,000, and economist says her cost is $29,500. O Accountant says cost is $30,000, and economist says her cost is $10,500.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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