Asked by
Sakshi Prasad
on Nov 28, 2024
Verified
The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers = $120,000
Utilities (electricity,water,disposal) costs = $8,000
Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000
Entrepreneur's forgone interest on personal funds used to finance the business = $6,000
Refer to the data.Creamy Crisp's explicit costs are:
A) $286,000.
B) $150,000.
C) $94,000.
D) $156,000.
Explicit Costs
Explicit costs refer to direct payments made for the operation of a business, like wages, rent, and materials.
Entrepreneur's Talent
The unique set of skills, insights, and experiences that an entrepreneur brings to a business venture, often driving its success.
Annual Lease
A contract specifying the terms under which one party agrees to rent property owned by another party for a period of one year.
- Identify the explicit costs and understand their effects on the financial statements of a company.
Verified Answer
SS
Learning Objectives
- Identify the explicit costs and understand their effects on the financial statements of a company.