Which of the following is NOT an explicit cost?
A) Wages paid to workers.
B) Payments for raw materials.
C) Rental payments for a building.
D) Income the business owner could have earned working for someone else.

Question

Quizplus · Accepted Answer

Explicit costs are direct payments made to others in the course of running a business, such as wages, payments for raw materials, and rent. Option D, the income the business owner could have earned working elsewhere, is considered an implicit cost, not an explicit cost, because it represents a potential income foregone rather than a direct outlay of cash.

Which of the Following Is NOT an Explicit Cost