Which of the Following Can Be an Opportunity Cost

question 11

Multiple Choice

Which of the following can be an opportunity cost?

• A)Interest on cost of inventory
• B)Cost of idle capacity
• C)Cost of underutilized labor
• D)The decline in an asset's value
• E)All of the above

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Definitions:

Unused Capacity

The difference between a company's actual production and its maximum possible production without additional capital investment.

Job-Order Costing

An accounting method that tracks the costs associated with creating a specific product or delivering a specific service, making it possible to calculate the profit on individual jobs.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or services based on a selected activity base.

Automated Shaper

A machine tool that operates under programmed control to shape materials.