-In economics, an implicit cost, also called an imputed cost, implied cost, or notional cost, is the opportunity cost equal to what a firm must give up in order to use factor of production which it already owns and thus does not pay rent for. It is the opposite of an explicit cost, which is borne directly. -An implicit cost is a cost that has occurred but it is not initially shown or reported as a separate cost. On the other hand, an explicit cost is one that has occurred and is clearly reported as a separate cost. -An easier way of thinking about the difference between the two, is to look at explicit costs as actual costs and implicit ones as implied costs. -Implicit costs are also known as economic costs.Explicit costs are are also known as out of pocket costs.
Dear Friend > Explicit and Implicit Costs Explicit Costs These are also known as out of pocket costs. They refer to costs involving immediate payment of cash. Salaries, wages, postage & telegram, printing & stationery, interest on loan etc. are some examples of explicit costs involving immediate cash payment. Implicit Costs These costs do not involve any immediate cash payment. They are not recorded in the books of account. They are also known as economic costs. Thanks