Suppose There Are Only Three Alternatives to Attending a "Free

question 107

Multiple Choice

Suppose there are only three alternatives to attending a "free" social event: read a novel (you value this at $10) ,go to work (you could earn $20) ,or watch videos with some friends (you value this at $25) .The opportunity cost of attending the social event is

• A)$10.
• B)$20.
• C)$25.
• D)$45.
• E)$55.

---

Definitions:

Profit Centers

Divisions or units within a business that are responsible for generating revenue exceeding their costs, contributing to the company's profit.

Contribution to Overhead

The portion of sales revenue that exceeds direct costs, contributing towards covering the fixed costs of a business.

Direct Expenses

Direct expenses are costs that can be directly traced to a specific cost object, such as a product or department.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes to fixed costs and profits.