Explicit and Implicit Cost

A Comparison....

Explicit Costs:

1. involve immediate cash payment

2. Actually incurred; can b objectively measured.

3. Are recorded in Books of A/cs

4. Purpose- Accounting, Reporting, Cost control & decision Making.

5. Also known as Out of Pocket costs.

6. Examples: Salaries, Wages, Advertisements etc

Implicit Costs:

1. Doesnt involve cash payment

2. Not Actually incurred; have to be estimated.

3. Are Not recorded in Books of A/cs

4. Purpose-  decision Making like asset replacement, make/buy etc.

5. Also known as Imputed/Notional costs.

6. Examples: Interest on own Capital, rent of owned premises, salary of proprietor etc.

good 

Really a good not for quick recall, really a good one.

The best. Can you also please give me a comparision betwwen cost control and cost reduction ? In this similar manner?

The comparision given by him was exactly correct

further explaining:

explicit cost: : involve immediate cash payment for the expenses actully incurrred to run the buisness

Implicit Cost : It is a cost of Self owned resources, Self Employed For e.g

Self employed: salary of proprietor ,

Self owned  resources  :  interest on capital

hey .. this was the exact thing i was searching 4 .. thank u soo much

you r most welcome...