What Is the Opportunity Cost of Making a Component Part

question 108

Multiple Choice

What is the opportunity cost of making a component part in a factory given no alternative use of the capacity?

• A) The variable manufacturing cost of the component.
• B) The total manufacturing cost of the component.
• C) The total variable cost of the component.
• D) Zero

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Definitions:

Statements

Financial records that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Non-negativity Constraints

are mathematical conditions in linear programming that require the variables to be zero or positive, never negative.

Feasible Region

In optimization problems, the set of all possible points that satisfy the problem's constraints.

Linear Programming

A mathematical technique used to maximize or minimize a linear objective function, subject to linear equality and linear inequality constraints.