All of the following are included in the calculation of accounting profit EXCEPT which of option?

Choose 1 answer:
A) implicit costs
B) total revenue
(c) variable costs
D) explicit costs
(E) fixed costs

Question

All of the following are included in the calculation of accounting profit EXCEPT which of option?

Choose 1 answer:
A) implicit costs
B) total revenue
(c) variable costs
D) explicit costs
(E) fixed costs

Accepted Answer

∻Solution∻ ‖ a ⋮ Implicit Costs: Implicit costs are the opportunity costs of using resources owned by the firm for production, rather than renting them out or using them in another way. These costs are not included in the calculation of accounting profit. ‖ ∻Answer∻ ⚹ A) implicit costs ⚹ ∻Key Concept∻ ⚹ Implicit costs are not included in accounting profit calculations. ⚹ ∻Explanation∻ ⚹ Accounting profit is calculated by subtracting explicit costs (such as variable and fixed costs) from total revenue. Implicit costs, which are opportunity costs, are not considered in this calculation. ⚹◊What impact does the inclusion of implicit costs have on the calculation of accounting profit in a business?⍭ Generate me a similar question◊

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