In deciding whether or not to accept a special order,what is the opportunity cost of using machinery for which the firm has sufficient excess capacity to accept the order?
A)The historical cost of the machinery
B)The undepreciated cost of the machinery
C)The same machinery cost allocated to regular production orders
D)Zero

Question

Quizplus · Accepted Answer

The opportunity cost of using machinery for which the firm has sufficient excess capacity is zero, as there is no cost incurred in accepting the special order. Therefore, the best choice is option D.

In Deciding Whether or Not to Accept a Special Order,what