An Explicit Cost Is

question 207

Multiple Choice

An explicit cost is

• A)omitted when accounting profits are calculated.
• B)a money payment made for resources not owned by the firm itself.
• C)an implicit cost to the resource owner who receives that payment.
• D)always in excess of a resource's opportunity cost.

---

Definitions:

Raw Materials Used

The total cost of all raw materials that are converted into finished goods within a reporting period.

Job Order Cost System

An accounting system that assigns costs to specific production jobs or batches and is used in manufacturing businesses where each job is unique.

Direct Labor Cost

Expenses associated with the labor directly involved in the production of goods or services.

Actual Overhead

The actual costs incurred for indirect materials, labor, and expenses in a production process.