Answer:
The wholesale cost for the guitars that Charles pays the manufacturer - Explicit Cost
The wages and utility bills that Charles pays. - Explicit Cost
The salary Charles could earn if he worked as an accountant. - Implicit Cost
The rental income Charles could receive if he chose to rent
out his showroom - Implicit Cost
$14000
$-9000
should not
$6,000
Step-by-step explanation:
Accounting profit= total revenue - explicit cost
Total revenue =price x quantity sold
Explicit cost includes the amount expended in running the business.
They include rent , salary and cost of raw materials
$704,000 - ($404,000 + $286,000) = $14000
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Implicit costs = 20,000 + 3000 = 23,000
14,000 - 23,000 = -9000