Explore BrainMass

Explore BrainMass

    Define accounting cost and economic cost for a company

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Suppose a company incurs the following costs: Labor-$500, Equipment-$400, Materials-$100. It owns the building, so it does not have to pay the usual $800 in rent.

    1. What is the total accounting cost?
    2. What is the total economic cost?
    3. How would accounting and economic costs change if the company sold the building and then leased it back?

    © BrainMass Inc. brainmass.com March 4, 2021, 9:50 pm ad1c9bdddf

    Solution Preview


    Question 1
    Total accounting cost = 500+400+100 = 1,000

    Question ...

    Solution Summary

    The expert defines accounting cost and economic cost for a company is determined.