An example of an explicit cost of production would be?
a. the lost opportunity to invest in capital markets when the money is invested in one's business. b. Both a and c are correct. c. lease payments for the land on which a firm’s factory stands. d. the cost of forgone labor earnings for an entrepreneur.
An example of an explicit cost would be?
The answer is D. It is D because explicit costs are like accounting costs. They are direct costs that come with operating a business. A,B and C are all implicit costs, they are like opportunity costs and do not have any direct value in a accounting perspective.
An example of an implict cost of production would be?
A. the income an entrepreneur could have earned working for someone else. B. the cost of raw materials for producing bread in a bakery. C. the cost of a delivery truck in a business that rarely makes deliveries. D. All of the above are correct.
What are some examples of explicit and implicit costs?
A2A.When you pull out your wallet, your hand helps make a cost ‘explicit’ when you buy something. One might say, most accounting deals with the explicit, when things are normal. There are tricky things galore.So, if you went up to the counter at McDonald’s and got a burger, let’s say, you did your side of the deal by giving them something that they can consider an asset. To you, it is immediate (cash) or future (chit, credit card, etc.).What might be implicit there? Plenty. Your shoes experienced some wear and tear, depending upon how far you walked. Oh? You see, we usually do not think of replacement costs. But, they are there. In fact, that whole set of things is very much implicit as you need to finagle numbers in order to get some type of estimate.Now, here is a thought. Suppose you overloaded your credit card. Then, you will have some fee to pay. Do you add this to your burger’s cost?It’s like bitcoin that can be very expensively handled on extracting value. As in, pay for a burger with such and end up with a very expensive piece of meat between two pieces of bread.
Which of the following is an example of an explicit cost?
d.all of the above Explicit costs require outlays of money. For example, wages paid to employees, rent payments, and utility bills are all explicit costs.
Question about the implict cost?
Christopher has $200,000 to invest, and he is considering the following business opportunity. He would use his $200,000 to buy a mechanical self-service car wash. He'll earn $40,000 per year from customers who drive through and use the water and soap jets to wash their cars. He'll spend $5,000 per year on maintenance and repair of that machine and $6,000 per year on supplies and utilities (water, soap, and electricity), and the car wash itself will depreciate by $7,000. That is, if he tried to sell it at the end of year, he would get only $193,000 for it. Since this car wash is self-service (drivers pay by using an automatic teller), he won't have to hire an attendant. If Christopher doesn't buy the car wash, he could leave his $200,000 in the bank, where it would earn 10% per year. What is Christopher's implicit cost of capital if he buys the mechanical car wash?
What is the implict cost?
You have been working for home-building companies for a number of years. You enjoy construction work, and now you want to start your own home-building company that you will run yourself. You quit your previous job that had been paying $40,000 per year. You have $40,000 in your savings account that you withdraw to start this company. The savings account had been paying you 5% interest. Because the $40,000 from your savings is not enough to start the company, you also borrow $2,300,000 from the bank. (The bank manager is willing to loan you such a large amount because he knows of your reputation and experience in the home-building industry.) You use the money to hire workers and buy the tools, machinery, and raw materials with which you will build houses. The cost per worker is $20,000 per year. In your first year, you plan to hire 48 workers to do the construction work, which means that the annual labor cost of your company will be $960,000 (48 x $20,000). With 48 workers, your company can build seven houses. You must also buy raw materials--land, wood, nails, plasterboard, and so forth. Each house requires $20,000 worth of raw materials. The cost of raw materials for seven houses is $140,000 (7 x $20,000). Finally, the bank charges 6% interest on your loan. The interest cost is $138,000 (6% of $2,300,000). 1.1. Based on this scenario, what are the total explicit costs for your construction company? A. $2,300,000 B. $960,000 C. $1,238,000 D. $1,280,000 E. $42,000
Microeconomics: The costs of production?
David lives in Chicago and runs a business that sells pianos. In an average year, he receives $780,000 from sales of pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $520,000; he also pays wages and utility bills totaling $150,000. If he does not operate this piano business, he can work in an accounting firm and receive an annual salary of $45,000. He owns his showroom; if he chooses to renit it out, he wll receive $25,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. No other costs are incurred in running this piano business. What are David's explicit costs of selling pianos? CHECK ALL THAT APPLY. 1) The salary David could earn if he worked in an accounting firm. 2) The wages and unitilty bills that David pays. 3) The wholesale cost for pianos that David pays the manufacturer. 4) The rental income David could receive per year if he chose to rent his showroom out. What is the accounting profit of David's piano business? A) $780,000 B) $65,000 C) $40,000 D) $-40,000 ($40,000 accounting loss) E) $110,000 What is the economic profit of David's piano business? A) $65,000 B) $40,000 C) $780,000 D) $-40,000 ($40,000 economic loss) E) $110,000 Taking into account David's implicit costs of doing business as well as his explicit costs, if David's only goal is to earn as much economic profit as possible, he________ (should/should not) continue to stay in the piano business.
What are some examples of a fixed cost that would be considered a direct cost?
Long answer: Unit labor is a direct cost to a say, a sofa. Lets say part of that particular wage to build a sofa is the supervisor's salary. Lets say the salary is the same amount every month. We can say the supervisor's salary is a cost directly attribited to making the soda but the salary is a fixed/consistent cost to making that soda.Short answer: You build a sofa. It requires a supervisor. The supervisor's salary is $7000 a month. It is a direct cost that is fixed.ex: Break it down per unit: 1000 sofas are built a month. $7000/1000=$7 will be the supervisor cost per sofa.
What is the difference between explicit cost and implicit cost?
The new company day care center will cost $4.9 million USD (explicit cost). However, because we are putting in the day care center, we will not be able to expand research and development, which we hoped would develop $6 million in new products over the next 5 years (implicit cost).One is stated (day care center cost) and one is implied (loss of research and development potential).