Definition of Explicit cost:
Explicit costs are typical business expenses that appear in the ledger and have a direct impact on business profitability. Explicit expenses are a well-defined dollar amount that is calculated on income statements. Examples of explicit expenditures include wages, rent payments, utilities, raw materials and other direct expenditures.
Contract costs and some amounts, such as rent, wages, salaries or electricity bills. Explicit costs for classification and registration are easily identifiable.
Explicit expenses, also called accounting costs, are easy to identify and relate to the business activities of the company to which they were assigned. They are listed in the company's ledger and are reported in the expenses listed in the income statement. The net profit (IN) of a company represents the outstanding revenue that remains after paying all explicit expenses. Explicit costs are only necessary to calculate profits, as they clearly affect the company's results. Clear cost measurement is very useful for strategic long-term business planning.
How to use Explicit cost in a sentence?
- I want to know what are the clear expenses so that I can budget accordingly and not spend too much.
- The clear cost is the only cost necessary to calculate the profit as it clearly affects the profit of the company.
- If you want to determine if a project is too risky, you need to calculate the cost clearly and decide from there.
- To finalize the support budget, you should always consider everything in the clear purchase costs.
- In accounting, explicit expenses are typical business expenses that are easy to detect and appear in the ledger.
Meaning of Explicit cost & Explicit cost Definition