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prohojiy [21]
3 years ago
11

Explain the difference between implicit and explicit costs

Business
1 answer:
Elodia [21]3 years ago
5 0

Explicit costs are reported in business documents.  They are also known as direct costs.  Explicit costs result in tangible assets for the company.  Some examples are: rent, wages, maintenance.  Explicit costs are easier to identify and account for because they leave a paper trail.


Implicit costs can be described as opportunity costs.  Implicit costs deal with intangibles and do not leave a paper record.  Implicit costs can be time or wasted opportunities, for example.  An implicit cost is simply the loss of a possible benefit or asset that didn't occur.  

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