In accounting, Explicit cost is the cost deducted total revenue to derive the Accounting profit.
In layman word, Profit means the amount gained on a transaction done. In accounting, profit is referred to as financial profit because it is the net income earned after the deduction of all incurring costs from total revenue.
The Incurred cost is what is Explicit Cost. Explicit cost means the direct payment made to facilitate running of the business. This cost includes wage, rent, materials, raw materials etc
Therefore, the correct answer is Explicit cost because after its deduction from total revenue, the accounting profit is what remains.
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