Question

what is difference between explicit and implicit cost?​

Answer 1

Answer:

Explicit costs involve a transfer of money and can be recorded on a balance sheet. (e.g. purchase of raw materials).

Implicit costs are related to the opportunity cost of one course of action that leads to lower income (e.g. a shop which offers space for a charity to collect money will have lower sales) Implicit costs are not usually recorded.

Explanation:

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Answer 2

The main difference between the two types of costs is that implicit costs are opportunity costs, while explicit costs are expenses paid with a company's own tangible assets. ... Implicit costs help managers calculate overall economic profit, while explicit costs are used to calculate accounting profit and economic profit.

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