Homework Answers
a. Total accounting cost = 17300
|
Accounting Costs |
|
|
Labor |
10000 |
|
Equipments |
7000 |
|
Materials |
300 |
|
Total |
17300 |
b. Total economic cost = Accounting cost + implicit cost = 29300
|
Economic Costs |
|
|
Labor |
10000 |
|
Equipments |
7000 |
|
Materials |
300 |
|
Own Building |
12000 |
|
Total |
29300 |
c. Accounting costs = 29300 (as implicit rent goes as paid out costs)
d. Economic cost = 29300 (as implicit costs = 0)
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