126k views
1 vote
Accountants use only _____ costs in their computations of short-run total cost.

User DaveV
by
8.1k points

1 Answer

3 votes
Explicit costs

Explicit costs are those that are reflected by actual cash flows and are direct payments made to others when running a business. These include payments or costs associated with wage, rent, and materials.

The short-run total cost includes both the variable and the fixed costs associated with the production.

In calculating for accounting profit, only the explicit costs are considered. However, when calculating for economic profit, the implicit costs are also included in the calculations.
User Osman Tuzcu
by
8.4k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.