Scenario 13-11
Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each.
-Refer to Scenario 13-11. The explicit cost for one birdhouse is
A)$4.
B)$5.
C)$8.
D)$9.

Question

Quizplus · Accepted Answer

The explicit cost is the actual cost incurred in producing one birdhouse, which is the cost of materials for one birdhouse, which is $5.

The best choice is to continue building birdhouses as he earns a profit of $15 per birdhouse ($20 selling price - $5 material cost). Additionally, he enjoys building birdhouses which may make it more fulfilling for him.

Scenario 13-11 Walter Builds Birdhouses. He Spends $5 on the Materials for Materials