explain what is meant by explicit; implicit; and sunk costs. How are they used to calculate accounting profit and economic profit?
All the costs that are linked or incurred to the business activities of a company and are easily identifiable are termed as direct or explicit costs these are sometimes also termed as accounting costs. They are documented in the company's standard register and are in excess of the income statement's costs.
After all-clear expenditures have been paid, total business income (NI) indicates the excess. Direct costs are simply the accounting costs that are necessary for calculating profits since they have a direct impact on the bottom line of the firm. For long-term company strategies, explicit cost measurements are extremely important.
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