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Business, 27.03.2020 02:53 ramirex9680
Kenji lives in Denver and runs a business that sells pianos. In an average year, he receives $731,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $431,000; he also pays wages and utility bills totaling $259,000. He owns his showroom; if he chooses to rent it out, he will receive $8,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Kenji does not operate this piano business, he can work as an accountant and receive an annual salary of $30,000 with no additional monetary costs. No other costs are incurred in running this piano business.
Identify each of Kenji's costs in the following table as either an implicit cost or an explicit cost of selling pianos.
Implicit Cost Explicit Cost
The wages and utility bills that Brian pays
The rental income Brian could receive if he chose to rent out his showroom
The salary Brian could earn if he worked as a financial advisor
The wholesale cost for the pianos that Brian pays the manufacturer
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Kenji lives in Denver and runs a business that sells pianos. In an average year, he receives $731,00...
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