1. Which of the following constitutes an implicit cost to the Johnston Manufacturing Company? A. payments of wages to its office workers B. rent paid for the use of equipment owned by the Schultz Machinery Company C. depreciation charges on company-owned equipment D. economic profits resulting from current production

Question

Marisol Haynes

Business

25 February, 02:59

1. Which of the following constitutes an implicit cost to the Johnston Manufacturing Company? A. payments of wages to its office workers B. rent paid for the use of equipment owned by the Schultz Machinery Company C. depreciation charges on company-owned equipment D. economic profits resulting from current production

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Answers (1)

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Camila Richard · Answer 1

C. depreciation charges on company-owned equipment

Explanation:

The implicit cost is also called as an indirect cost and is that opportunity cost which is a form must be given in order to use the factors of production for which it already owns and thus do not pay a rent. Thus related to the depreciation on the company that they own the equipment and is applicable to the owned assets.