Opportunity Cost

question 47

Multiple Choice

Opportunity cost

• A)Is the value of another option that must be given up in order to achieve the first option.
• B)Must be subtracted from the variable production cost to determine the minimum transfer price on an internal transfer.
• C)Must be considered in determining the transfer price only when the company has sufficient excess capacity to meet demand.
• D)Refers to the fixed cost applied to products that are transferred between divisions.

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Definitions:

Intellectual Capital

The intangible value of an organization, including the skills, knowledge, experience, and relationships of its employees.

Knowledge Resources

The information, expertise, and skills that individuals or organizations possess, which can be leveraged to make decisions, solve problems, and create value.

Information Technology

The employment of computers, storage systems, networking, and additional physical hardware, infrastructure, and methods for the generation, processing, storage, security, and transfer of all types of electronic data.

Computer Hardware

The physical components of a computer system, including the central processing unit, monitor, keyboard, and mouse.