small coffee house has the following costs:  building and pizza oven rentals 100,000  labor 120,000 owners salary given up 85,000 value of entrepreneurial talent 30,000 raw material 100,000 Bank loan payment 15,000 interest given up by owner 5,000 revenue for the firm is expected to be 420,000 for the year.  a. Calculate the firms accounting profit and its economic profits  b. Should the firm continue business in the long term if revenue and costs continue at the same level? Why or why not?

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Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.