Which of the following is an example of an "explicit cost"?

The wages a proprietor could have made by working as an employee of a large firm.

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The income that could have been earned in alternative uses by the resources owned by the firm.

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The payment of wages to factory labour of the firm.

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The normal profit earned by a firm.

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Solution

The correct option is C The payment of wages to factory labour of the firm.
The wages paid to labour is an accounting direct cost that must be paid in order for production to take place. Thus it is an explicit cost.

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Similar questions

Q. An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results: Firm A Firm B No. of wage earners 586 648 Mean of monthly wages Rs 5253 Rs 5253 Variance of the distribution of wages 100 121 (i) Which firm A or B pays larger amount as monthly wages? (ii) Which firm, A or B, shows greater variability in individual wages?

An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results:

$\begin{matrix} F i r m A & F i r m B N o . o f w a g e e a r n e r s & 586 & 648 M e a n o f m o n t h l y w a g e s & R s . 5253 & R s . 5253 V a r i a n c e o f t h e d i s t r i b u t i o n o f w a g e s & 100 & 121 \end{matrix}$

(i)Which firm spends larger amount as monthly wages?

(ii)Which firm shows greater variability in individual wages?

An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results.

Firm A Firm B

No. of wage earners 586 648

Mean of monthly wages Rs 5253 Rs 5253

Variance of the distribution of wages. 100 121

(i) which firm A or B pays larger amount as monthly wages ?

(ii) which firm A or B, shows greater variability in individual wages ?

An anaoysis of the weekly wages paid to workers in two firms A and B, belonging to the same industry gives the following results:

$\begin{matrix} Firm A & Firm B Average weekly wages & 586 & 648 Average weekly wages & R s . 52.5 & R s .47 .5 Variance of the distribution of wages & 100 & 121 \end{matrix}$

(i) Which firm A or B pays out larger amount as weekly wages ?

(ii) Which firm A or B has greater variability in individual wages ?

An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results:

	Firm A	Firm B
No. of wage earners	586	648
Mean of monthly wages	Rs 5253	Rs 5253
Variance of the distribution of wages	100	121

(i) Which firm A or B pays larger amount as monthly wages?

(ii) Which firm, A or B, shows greater variability in individual wages?

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Which of the following is an example of an "explicit cost"?

The correct option is C The payment of wages to factory labour of the firm.The wages paid to labour is an accounting direct cost that must be paid in order for production to take place. Thus it is an explicit cost.

The correct option is C The payment of wages to factory labour of the firm.
The wages paid to labour is an accounting direct cost that must be paid in order for production to take place. Thus it is an explicit cost.