Answered: An explicit cost is: Select one: a)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

An explicit cost is:

Select one:

a) An implicit cost to the factor of production owner who recieves that payment

b) a money payment made for factors of production not owned by the firm itself

c) is the cost of the forgone alternative incurred by the individual after making choices

d) omitted when accounting profits are calculated

e) always in excess of a factor of production's oppurtunity cost

Expert Solution

Step 1

Explicit cost:-

Explicit costs often referred to as accounting prices, are easy to compute and are related to the operational activities of the organization.
They are documented in a corporation's general ledger and transferred to the expenses listed just on the statement of revenue.
The term "net profit" or "net income" refers to the remaining profits that remain once all specific costs have indeed been covered (NI).
Explicit costs are the sole accounting expenses required to determine a profit because they have a direct effect on a company's bottom line.
The specific cost statistic is quite useful for the organization's long-term strategic goal.

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions