Opportunity Costs Are Recorded in the Accounts of an Organization
Opportunity costs are recorded in the accounts of an organization.
Managers will always seek to eliminate all unprofitable product lines.
In the target costing approach to pricing,the total cost of a product is first determined and then an expected level of mark-up is added to get the desired selling price.
Assuming all units that are produced can be sold,in deciding which of alternative products to produce in circumstances of constrained resources,managers will always seek to maximize the production of the product with the highest per-unit contribution margin.