Question

what is meant by implicit cost

Answer 1

An implicit cost is any cost that has already occurred but is not necessarily shown or reported as a separate expense. It represents an opportunity cost that arises when a company allocates internal resources toward a project without any explicit compensation for the utilization of resources.

Answer 2

Implicit Cost

★ It is not actual money expenditure but it is a cost of factors owned by the firm and it is used by the firm in its production process.

★ It is the receipt concept.

★ Example:- Wages of self labour and rent for owned premises act.