Accounting costs represent

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Accounting costs are the explicit costs paid by the firm, such as wages, rent, utilities, and materials. These costs are recorded in the firm's financial statements and are used to calculate the firm's net income. Accounting costs do not include opportunity costs, which represent the value of the forgone alternative when a decision is made. Sunk costs, which are costs that have already been incurred and cannot be recovered, are also not included in accounting costs. Accounting costs can be both short run and long run costs.

Accounting Costs Represent