What is the total economic cost of the Turnip Tom's Inc. organic farm; to calculate the cost one must first find the totals of both the explicit and implicit cost and subtracting them from company's revenues (Thomas & Maurice, 2010)?
First, what is the explicit cost? The cost of products sold is twelve-five-hundred added to selling expenses at five-thousands-five equals eighteen-thousands. Administrative expenses added to expenses of product sold and selling expenses, that is an additional five-thousands-two-hundred-dollars comes to a total of twenty-three-thousand-two-hundred dollars (Thomas & Maurice, 2010).
Secondly, the implicit cost is added up. Interest expense of nine-thousand-five-hundred-dollars plus legal expenses of one-thousand-two-hundred-dollars, as well as adding income taxes of twenty-two-thousand-dollars for a total of …show more content…
In order get the economic results one is looking for one must subtract the fifty-five-thousand-nine-hundred dollars from the total revenues of eighty-nine-thousand-dollars leaving a total of thirty-three-thousand-one-hundred-dollars.
The total economic cost places special importance on opportunity cost, these resources are used to produce the goods that company needs to make a profit (Thomas & Maurice, 2010). According to Rong Zhao from the University of Calgary explores how revenues affect the driving cycle of a business and point out that it is a major principle to measure the success of a business (Rong, 2017).

In closing, it is essential that each firm or company review and analyze the income statement (Shah, 2011). The results of adding up both explicit and implicit cost and then subtracted from the revenues show the company that there is an opportunity cost for production to continue to market and sell the