The accounting profit or loss and the economic profit or loss is to be determined in each situation. Concept Introduction: Accounting Profit= Total Revenue −Explicit Cost. Economic Profit = Accounting profit- Implicit Cost.

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5) Joe's Service Division Joe runs the Service Division for a car dealership. The overall dealership has profit of $10 million on sales of $100 million and costs of $90 million. Joe's division contributed $9 million in sales and $7 million in costs. If the Service Division is evaluated as a profit center, what dollar amount is most relevant to Joe? $7 million $10 million $2 million $9 million

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Chapter 7, Problem 3P

To determine

To Determine: The accounting profit or loss and the economic profit or loss is to be determined in each situation.

Concept Introduction: Accounting Profit= Total Revenue −Explicit Cost.

Economic Profit = Accounting profit- Implicit Cost.

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5) Joe's Service Division Joe runs the Service Division for a car dealership. The overall dealership has profit of $10 million on sales of $100 million and costs of $90 million. Joe's division contributed $9 million in sales and $7 million in costs. If the Service Division is evaluated as a profit center, what dollar amount is most relevant to Joe? $7 million $10 million $2 million $9 million

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