Read this. Then post your answer. I'll be glad to check it.
http://www.investopedia.com/terms/i/implicitcost.asp
1. (TCO 3) Which of the following is most likely to be an implicit cost for Company X? (Points : 1)
Forgone rent from the building owned and used by Company X
Rental payments on IBM equipment
Payments for raw materials purchased from Company Y
Transportation costs paid to a nearby trucking firm
4 answers
1 Forgone rent from the building owned and used by Company X
Correct.
Suppose a company incurs the following costs: labor, $600;equipment, $200; and materials, $100.
The company owns the building, so it doesn't have to pa theusual $800 in rent.
a) What is the total accounting cost?
b)What is the total economic cost?
c)How would accounting and economic costs change if thecompany sold the build
The company owns the building, so it doesn't have to pa theusual $800 in rent.
a) What is the total accounting cost?
b)What is the total economic cost?
c)How would accounting and economic costs change if thecompany sold the build
1 answer