Explanation:

Accounting profit, also referred to as bookkeeping profit or financial profit, is net income earned after subtracting all dollar costs from total revenue. In effect, it shows the amount of money a firm has left over after deducting the explicit costs of running the business.

The costs that need to be considered include the following:

• Labor, such as wages
• Inventory needed for production
• Raw materials
• Transportation costs
• Sales and marketing costs
• Production costs and overhead