Asked by
Elian Reyes
on Nov 25, 2024
Verified
The following is cost information for the Creamy Crisp Donut Company.Entrepreneur's potential earnings as a salaried worker = $50,000Annual lease on building = $22,000Annual revenue from operations = $380,000Payments to workers = $120,000Utilities (electricity, water, disposal) costs = $8,000Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000Entrepreneur's forgone interest on personal funds used to finance the business = $6,000Creamy Crisp's total economic costs are
A) $286,000.
B) $150,000.
C) $94,000.
D) $156,000.
Total Economic Costs
The sum of all costs associated with the production of a good or service, including both explicit (direct) costs and implicit (indirect or opportunity) costs.
- Identify the differences between explicit and implicit expenses, as well as economic versus accounting profits.
Verified Answer
AL
Learning Objectives
- Identify the differences between explicit and implicit expenses, as well as economic versus accounting profits.