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An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, [1] as opposed to implicit costs, where no actual payment is made. [2] It is possible still to underestimate these costs, however: for example, pension contributions and other "perks" must be taken into account when ...
An accountant measures the firm's accounting profit as the firm's total revenue minus only the firm's explicit costs. An economist includes all costs, both explicit and implicit costs, when analyzing a firm. Therefore, economic profit is smaller than accounting profit. [3] Normal profit is often viewed in conjunction with economic profit ...
The comparison includes the gains and losses precluded by taking a course of action as well as those of the course taken itself. Economic cost differs from accounting cost because it includes opportunity cost. [3] [2] [4] (Some sources refer to accounting cost as explicit cost and opportunity cost as implicit cost. [2] [4])
If a person leaves work for an hour and spends $200 on office supplies, then the explicit costs for the individual equates to the total expenses for the office supplies of $200. If a printer of a company malfunctions, then the explicit costs for the company equates to the total amount to be paid to the repair technician.
In this situation, some firms not already in the industry tend to join the industry if they calculate that they will make a positive economic profit (profit in excess of the cost of acquiring investible funds). More and more firms will enter until the economic profit per firm has been driven down to zero by competition.
The New Jersey-based company faced inflationary pressures on product costs, which reduced consumer spending, according to CEO Barry Litwin, as well as $800 million in outstanding debt. Red Lobster
Direct labor cost is a part of wage-bill or payroll that can be specifically and consistently assigned to or associated with the manufacture of a product, a particular work order, or provision of a service. Also, we can say it is the cost of the work done by those workers who actually make the product on the production line.
A Georgia Bulldogs football player who was inactive for the Sugar Bowl against Notre Dame Thursday evening drew a bizarre penalty.. Parker Jones was on the sideline for the game and cost his team ...