Answer:
Wages and utility bills are explicit costs because they directly affect the company profit, have dollar amounts, and will not exist if the company ceases to exist.
Step-by-step explanation:
Giving the following information:
Bob lives in New York City and runs a business that sells guitars. In an average year, he receives $851,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $476,000; he also pays wages and utility bills totaling $281,000.
Wages and utility bills are explicit costs because they directly affect the company profit, have dollar amounts, and will not exist if the company ceases to exist.