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Implict cost

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A business owner makes 600 items by hand in 200 hours. She could have earned $30 an hour working for someone else. If the item sells for $40 each, and the explicit costs total $8,000, then:

a. total revenue equals $8,000.
b. implicit costs equal $6,000.
c. the accounting profits equal $10,000.
d. the economic profit equals $16,000.

You must show these math calculations

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Solution Summary

Implict cost is determined.

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Revenues: Quanity sold * Price= 600*40= $24000

Accounting Cost= Explicit cost= $8000

Accounting ...

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