What is the opportunity cost of making a component part in a factory with no excess capacity?
A) Variable manufacturing cost of the component.
B) Fixed manufacturing cost of the component.
C) Cost of the production given up in order to manufacture the component.
D) Net benefit foregone from the alternative use of the capacity required.

Question

Quizplus · Accepted Answer

Opportunity cost is the net benefit foregone from the next best alternative use of resources, in this case, the capacity used to make the component.

What Is the Opportunity Cost of Making a Component Part