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| The CPA reviewed the minutes of a board of directors’ meeting of LQR Corp., an audit client. An order for widget handles was outsourced to SDT Corp. because LQR could not fill the order. By having SDT produce the order, LQR was able to realize $100,000 in sales profits that otherwise would have been lost. The outsourcing added a cost of $10,000, but LQR was ahead by $90,000 when the order was completed. Which of the following statements is correct regarding LQR’s action? A. Explicit costs are opportunity costs from purchasing widget handles from resource market. B. The use of resource markets outside of LQR involves opportunity cost. C. Implicit costs are not opportunity costs because they are internal costs. D. Accounting profit is total revenue minus explicit costs and implicit costs. |