Final answer:
Cost objects are anything for which costs are separately measured, including customers and organization subunits. Explicit costs are direct payments for resources, while implicit costs are opportunity costs of owned resources. Calculating profit requires understanding the relationship between cost and revenue.
Step-by-step explanation:
Cost objects can be defined as anything for which a separate measurement of costs is desired. These can include customers, specific products, projects, and organization subunits like departments or divisions. The concept of cost objects is fundamental in managerial accounting where costs are assigned to different cost objects for the purposes of budgeting, accounting, and financial analysis.
Explicit costs are direct, out-of-pocket payments for expenses like wages, rent, and materials, while implicit costs represent the opportunity costs of using resources owned by the business without direct payment, like the owner's time or the use of space the company already owns. The relationship between cost and revenue is crucial for businesses, as profitability is calculated by subtracting the total cost from total revenue, where Profit = Total Revenue - Total Cost.