The profit earned by a business during previous accounting periods on an average basis is termed as the Average Profit. It takes into account the average profits for the past few years and fixes the value of goodwill as to many year's purchase of this amount. Average profit maybe simple or weighted in nature.
Average profit is the total profit divided by output.It is an approach used to identify the profit margin that is achieved on each unit of a product that is produced or sold. It can be a normal profit if economic profit (including opportunity cost) is equal to zero.
Answers & Comments
Verified answer
Answer:
The profit earned by a business during previous accounting periods on an average basis is termed as the Average Profit. It takes into account the average profits for the past few years and fixes the value of goodwill as to many year's purchase of this amount. Average profit maybe simple or weighted in nature.
Explanation:
.
Answer:
Average profit is the total profit divided by output.It is an approach used to identify the profit margin that is achieved on each unit of a product that is produced or sold. It can be a normal profit if economic profit (including opportunity cost) is equal to zero.
Hope it helps u