Question

what is supper profit​

Answer 1

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.

Calculate the Usual Profits by multiplying employed capital with normal return rate. Calculate average maintainable profit. Calculate Super Profit as follows: Super Profit = Maintainable Average profits – Normal Profits.