Scenario 13-3
Tony is a wheat farmer,but he also spends part of his day teaching guitar lessons.Due to the popularity of his local country western band,Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business.Farmer Tony charges $25 an hour for his guitar lessons.One spring day,he spends 10 hours in his fields planting $130 worth of seeds on his farm.He expects that the seeds he planted will yield $300 worth of wheat.
-Refer to Scenario 13-3.Tony's accountant would most likely figure the total cost of his wheat planting to equal

Question

Quizplus · Accepted Answer

The accountant would consider the explicit cost of planting, which is the $130 spent on seeds. Opportunity costs, like the $250 Tony could have earned from guitar lessons, are not typically included in accounting costs.

Scenario 13-3 Tony Is a Wheat Farmer,but He Also Spends Part of Part