Ask Question
13 August, 22:16

Suppose a firm has an annual budget of $150,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner-manager does not choose to pay himself, but he could receive income of $90,000 by working elsewhere. The firm earns revenues of $320,000 per year. What are the annual accounting costs for the firm described above?

+1
Answers (1)
  1. 13 August, 22:26
    0
    The annual explicit costs for the firm is $310,000.

    Explanation:

    Explicit cost refers to the cost of the resources purchased by firm from outsiders.

    Calculate the annual explicit cost -

    Annual explicit cost = Wages and salaries + Materials + New equipment + rented property + interest cost on capital

    Annual explicit cost = $150,000 + $75,000 + $30,000 + $20,000 + $35,000

    Annual explicit cost = $310,000

    Thus,

    The annual explicit costs for the firm is $310,000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Suppose a firm has an annual budget of $150,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers