A person starts her own business after quitting a job in which she made $75,000 a year. Expenses include $100,000 for wages and salaries, $15,000 for utilities, $150,000 for materials and supplies, and $5000 for gasoline. She uses her own car in her work, for which she paid $16,000 two years earlier. She could rent the car for $5,000 a year. Explicit costs are

a. $195,000

b. $275,000

c. $270,000

d. $286,000

Question

Business

Calvin Franco

27 October, 04:28

A person starts her own business after quitting a job in which she made $75,000 a year. Expenses include $100,000 for wages and salaries, $15,000 for utilities, $150,000 for materials and supplies, and $5000 for gasoline. She uses her own car in her work, for which she paid $16,000 two years earlier. She could rent the car for $5,000 a year. Explicit costs are

a. $195,000

b. $275,000

c. $270,000

d. $286,000

+1

Answers (1)

Know the Answer?

Luis Bonilla · Answer 1

Explicit costs are business expenses that are easily identifiable and can be accounted for.

1) Wages and salaries = 100,000

2) Utilities expenses = 15,000

3) Materials and Supplies = 150,000

4) Gasoline expense = 5,000

100,000 + 15,000 + 150,000 + 5,000 = 270,000 answer is C.