Opportunity Cost Is Best Defined as

question 160

Multiple Choice

Opportunity cost is best defined as

• A) the sum of the dollar values of all alternatives given up when choices are made.
• B) the cost of producing the purchased goods.
• C) the next highest valued alternative when a choice is made.
• D) the dollar price of the purchased item.

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Definitions:

Cost of Goods Sold

The straightforward costs related to the production of goods a company distributes, encompassing materials and labor expenses.

Gross Profit

The financial measure representing the difference between sales revenue and the cost of goods sold, indicating the efficiency of a company in managing its labor and supplies in production.

Net Income

The company's final earnings following the deduction of all expenses and taxes from the gross revenue.

Accrual System

An accounting method where income and expenses are recorded when they are earned or incurred, regardless of when the cash transactions occur.