Which of the Following Is Part of a Firm's Opportunity

question 4

Multiple Choice

Which of the following is part of a firm's opportunity costs? I. wages
II) utility costs
III) interest on a bank loan
IV) interest forgone on funds used to buy capital equipment

• A) I and II
• B) III and IV
• C) I, II and III
• D) I, II, III and IV

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Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished goods.

Fabrication Department

A specialized sector within a manufacturing facility where goods are constructed or assembled.

Conversion Costs

The combination of direct labor and manufacturing overhead costs that are incurred to convert raw materials into finished products.

Weighted-Average Method

An inventory costing method that averages the cost of inventory available for sale with the cost of goods sold to determine the cost of ending inventory and cost of goods sold.