(CMA)What is the opportunity cost of making a component part in a factory given no alternative use of the capacity?
A)The variable manufacturing cost of the component.
B)The total manufacturing cost of the component.
C)The total variable cost of the component.
D)Zero

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative foregone, meaning it is the cost of the next best alternative that could have been chosen instead. However, given that there is no alternative use of the capacity, there is no opportunity cost. Therefore, the answer is D - zero.

(CMA)What Is the Opportunity Cost of Making a Component Part