Question

________ are the costs of activities managers cannot trace to individual products or services but support the organization as a whole.

Answer 1

Implicit costs are the costs of activities that cannot be traced to a single product or service but support the entire organization, including depreciation and owners' time without formal salary.

Step-by-step explanation:

The costs of activities managers cannot trace to individual products or services but support the organization as a whole are known as implicit costs. These costs are essential and represent the opportunity cost of using resources that the firm already owns.

Unlike explicit costs, which are out-of-pocket expenses such as wages and rent, implicit costs include non-monetary expenses like the depreciation of goods and equipment, and the time and effort the owners invest without receiving a formal salary.