South Avenue Publishing produces self-help books. The company’s profit is the

South Avenue Publishing produces self-help books. The company’s profit is the

A.money the company earns after paying all of its production costs.

B.paper, binding, and other supplies the company purchases.

C.total amount the company receives from the sale of its books.

D.amount of money the company earns from selling a single book.

Answer: A.money the company earns after paying all of its production costs.

Identifying profit is also accurate under this option for South Avenue Publishing. In the case of a business organization, profit is defined under the organizational and business economic definition as the total production of a business entity minus the total cost of production. To the publishing company of South Avenue, it means the sum of money that is earned beyond the cost recovered for the production as well as distribution of the self-help books.

To explain this let us talk of an example. For example, the South Avenue Publishing company offers one self-helping book that circulates 10,000 at $20; for the firm, it records $200,000. However, to have these books produced, the company encounters the following costs. These may be $50,000 toward print and cover charges, $30,000 toward the author’s commission, $20,000 toward marketing and distribution, and $40,000 toward staff wages and expenses. The total expenses have been estimated to be $ 140,000 Only. Since the total revenue is $ 200 000 when these costs have been subtracted a profit for the amount of $ 60 000 is arrived at from a deduction of $ 140 000.

However, it is essential to differentiate before proceeding further, between profit and the revenue factor, or price of a single book. It also differs from the cost of supplies since they are the expenditure that reduces the profit-earning capacity of the business. Having a major focus on profit, South Avenue Publishing can assess the financial results achieved and, therefore, develop further outlines of the books to be published, their price as well as other strategic points in the company’s performance.