Asked by
nelida Rubio
on Nov 25, 2024
Verified
Which of the following is most likely to be an implicit cost for Company X?
A) forgone rent from the building owned and used by Company X
B) rental payments on IBM equipment
C) payments for raw materials purchased from Company Y
D) transportation costs paid to a nearby trucking firm
Implicit Cost
The opportunity costs of using resources that a firm already owns to make its products, as opposed to renting, selling, or using them in another way.
Forgone Rent
The potential income lost by choosing to use a property or resource in a way that is not financially optimal or by not using it at all.
- Differentiate between explicit and implicit expenditures, alongside economic and accounting gains.
- Distinguish between implicit expenses and the costs of missed opportunities.
Verified Answer
CR
Learning Objectives
- Differentiate between explicit and implicit expenditures, alongside economic and accounting gains.
- Distinguish between implicit expenses and the costs of missed opportunities.