An example of an implicit cost of production for a forestry company would be:

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Quizplus · Accepted Answer

An implicit cost is a cost that is not recorded in accounting books, but it is a cost that a company incurs as it engages in business operations. In this scenario, the interest income that could have been earned in a bank if the company hadn't used its profit to finance a new replanting is an opportunity cost and is an example of an implicit cost for the forestry company. Choice A is an explicit cost of production, and choice C is a direct cost of transportation. Therefore, choices A and C are incorrect.

An Example of an Implicit Cost of Production for a Forestry