Question

difference between average profit and super profit​

Answer 1

Answer:

It is excess of average profit over normal profit. Normal rate of return is not relevant in the calculation of average profit. Average capital employed is not considered while calculating average profit. ... Super profit is relevant for super profit method and capitalization of super profit method of valuation of goodwill.

Explanation:

Answer 2

Explanation:

Super profit is the excess of average profits over normal profits. Under this method, goodwill is calculated on the basis of super profits. Normal rate of return on the capital employed is compared with the actual average profits to find out the super profits