Opportunity cost
A)is the value of another option that must be given up in order to achieve the first option.
B)must be subtracted from the variable production cost to determine the minimum transfer price on an internal transfer.
C)must be considered in determining the transfer price only when the company has sufficient excess capacity to meet demand.
D)refers to the fixed cost applied to products that are transferred between divisions.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next-best alternative that must be given up in order to pursue a certain action or decision. It is an important concept in economics and decision-making as it helps to determine the true cost of choosing one option over another.

Opportunity Cost