Refer to the accompanying scenario to answer the following questions:
Dave's Batting Cages is located in Boston, Massachusetts. During the first year of operation, Dave's Batting Cages incurred many costs. In that year, Dave spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Dave took out a loan to open his business, in which he would have earned $1,500. His previous job, which he could get back at any time, paid him $50,000.
-Dave's Batting Cages incurred ________ in explicit costs.
A) $9,500
B) $7,000
C) $51,500
D) $8,000
E) $50,000

Question

Quizplus · Accepted Answer

Explicit costs are the actual expenses incurred in running a business. In this case, Dave's Batting Cages incurred $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Therefore, the total explicit cost incurred by Dave's Batting Cages is $5,000 + $2,000 + $1,000 = $8,000.

Refer to the Accompanying Scenario to Answer the Following Questions