Explicit, implicit and economic costs
Could you please help me with a question on how to calculate explicit, implicit and economic costs using the attached illustration.
** Please see the attached file for the complete problem description **
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Applied Problem # 1
At the beginning of the year, an audio engineer quit his job and gave up a salary of $175,000 per year in order to start his own business, Sound Devices, Inc. The new company builds, installs, and maintains custom audio equipment for businesses that require high-quality audio systems. A partial income statement for Sound Devices, Inc., is shown below:
Revenues 2010
Revenue from sales of product and services ................. $970,000
Operating costs and expenses
Cost of products and services sold ................................ $355,000
Selling expenses ...
Solution Summary
This solution provides an explanation on how to compute explicit, implicit and economic costs for the given problem. The solution includes a Word formatted copy of the tutorial for the student's convenience.