When a Business Has Implicit Costs

question 377

Multiple Choice

When a business has implicit costs

• A) economic profits are greater than accounting profits.
• B) economic and accounting profits are the same.
• C) economic profits are less than accounting profits.
• D) economic costs are the same as accounting costs.

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Definitions:

Work in Process

Inventory items that are currently in the production process but are not yet completed products.

Time Tickets

Documents used to record the amount of time an employee spends on various tasks, typically for the purpose of allocating labor costs to specific jobs or projects.

Employees' Earnings Records

Documentation that details the wages or salaries earned by employees, including deductions and net pay, over a period.

Job Order Cost Sheets

Documents that track the direct materials, direct labor, and manufacturing overhead costs attributable to individual jobs or batches within a production process.