All categories

3 years ago

Explain the difference between implicit and explicit costs

1 answer:

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.

You might be interested in

You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a ve

Murljashka [212]

Answer:

1) You should go home and watch TV.

Explanation:

Since you value seeing the play $10, then you should leave the theater and go to your house to watch TV since that has a higher value for you ($12).

We are talking about opportunity costs here. Opportunity costs are the extra costs or benefits lost from choosing one activity or investment over another. In this case the opportunity costs are:

watch the play = $10
watch TV = $12
read a book = $8

Since watching TV is more valuable to you, then that is what you should be doing.

3 0

2 years ago

If the Mayor of Little Rock, Arkansas is also a director of a Little Rock municipal securities dealer, which of the following st

riadik2000 [5.3K]

Answer: B. I and IV

Explanation:

A CONTROL RELATIONSHIP is defined as a situation where an issuer is controlled by the DEALER, or the Dealer is controlled by the Issuer, or there common control between the Issuer and Dealer of the security. As Mayor of Little Rock and also the Director of the Municipal Dealer, there is definitely a CONTROL relationship going on.

The Municipal Securities Rulemaking Board (MSRB) requires that when a control relationship exists between a municipal securities dealer and the issuer whose bonds are recommended by that dealer, the nature of the relationship must be DISCLOSED to the customer.

Hence option B is correct.

4 0

3 years ago

Ann works 5 1/2 hours, Mary works 6 1/3 hours, and John works 4 1/4 hours. How many combined hours have they worked?

Luden [163]

16 1/12 hours. To make it easier add up all the whole numbers first then find the common denominator, which is 12. Turn all the fractions into fractions with the denominator of 12 add those up and you shall get 16 1/12.

5 0

3 years ago

Standahl Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports.

avanturin [10]

Answer:

$335,428

Explanation:

The computation of the plane operating cost is shown below:

Plane Operating Cost = Fixed cost + (Variable cost per unit × quantity) + (Variable cost per unit × quantity)

= $41,490 + ( $2,839 × 101 flights) + ($23 × 313 passengers)

= $41,490 + $286,739 + $7,199

= $335,428

We only considered the planned activity as we have to compute the plane operating cost for the planning budget

8 0

2 years ago

Teresa has just opened a NOW account that pays 3.50% interest. If she maintains the account at the required minimum balance of

nataly862011 [7]

Answer:

She will earn $17.50.

Explanation:

Interest earned is the amount of interest earned on the a deposited amount in a saving amount on simple interest.

Balance in the account = $500

Interest rate = 3.5%

Interest earned = Average balance x Interest rate

Interest earned = $500 x 3.50%

Interest earned = $500 x 0.035

Interest earned = $17.50

5 0

2 years ago