An explicit cost is:
A)omitted when accounting profits are calculated
B)a payment made for resources not owned by the business itself
C)an implicit cost to the resource owner who receives that payment
D)always in excess of a resource's opportunity cost
E)the only cost taken into account when economic profits are calculated

Question

Quizplus · Accepted Answer

An explicit cost is a payment made for resources not owned by the business itself, such as rent, wages, or the cost of raw materials. It is an actual out-of-pocket expense that is deducted from revenues to calculate accounting profits. Unlike implicit costs, explicit costs are included in both accounting and economic profits.

An Explicit Cost Is