Implicit Costs Are

question 379

Multiple Choice

Implicit costs are

• A) the costs of using factors that a producer hires or rents.
• B) the opportunity costs of using factors that a producer does not buy or hire but already owns.
• C) costs that are taken into consideration by accountants.
• D) costs that are variable in the short run and fixed in the long run.

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Definitions:

Cost of Goods Manufactured

Total manufacturing costs incurred plus the beginning work-in-process inventory, minus the ending work-in-process inventory.

Adjusted Cost

The modification of the historical cost of an asset to reflect changes due to depreciation or amortization.

Goods Sold

The total quantity of products a company has sold during a particular period; it is closely related to "cost of goods sold" but focuses on the volume rather than the cost.

Work in Process

Inventory items that are partially completed, residing between raw material and finished goods stages in the production process.