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A company's expenditure on raw materials is regarded as?

Economics
JAMB 2020

A company's expenditure on raw materials is regarded as?

  • A. explicit cost
  • B. implicit cost
  • C. prime cost
  • D. average cost
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Correct Answer: Option A
Explanation

Explicit costs are direct payments incurred by a firm in the course of running a business. These are costs actual and physical costs incurred by a firm. Examples of explicit costs include wages, lease payments, utilities, raw materials, and other direct costs.


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