Owner-supplied labor is a cost that is usually:
A) included in both accounting costs and economic costs.
B) included in accounting costs but not in economic costs.
C) included in economic costs but not in accounting costs.
D) not included in either accounting costs or economic costs.
E) ignored because it is impossible to place a value on it.

Question

Quizplus · Accepted Answer

Owner-supplied labor is considered a cost in economic analysis because it represents an opportunity cost—the income the owner could have earned by working elsewhere. This cost is not typically recorded in financial accounting records, which focus on actual monetary transactions.

Owner-Supplied Labor Is a Cost That Is Usually