All of the following are explicit costs of production EXCEPT:
A) wages and salaries paid to company employees.
B) rent paid for manufacturing space.
C) raw materials costs.
D) depreciation on company equipment
E) the market rate of space that could be rented but instead is used in the manufacturing process.

Question

Quizplus · Accepted Answer

E is not an explicit cost, but rather an opportunity cost. It represents the cost of not being able to rent the space out for market value because it is being used for production. The other choices (A-D) are all explicit costs of production.

All of the Following Are Explicit Costs of Production EXCEPT