Implicit Costs Can Be Defined as

question 100

Multiple Choice

Implicit costs can be defined as

• A)accounting profit minus explicit cost.
• B)the non-monetary opportunity cost of using the firm's own resources.
• C)the deferred cost of production.
• D)total cost minus fixed costs.

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Definitions:

Income Statement

A financial report that shows the company's revenues and expenses over a specified period, resulting in net profit or loss.

Absorption Costing

A financial approach that incorporates every aspect of manufacturing expenses, such as direct materials, direct labor, and all variable and fixed overhead costs, into the price of a product.

Variable Costing

An accounting methodology that assigns only variable costs to inventory, treating fixed costs as expenses of the period.

Operating Income

Refers to the profit realized from a business's core operating activities, excluding deductions of interest and taxes.