The Opportunity Cost of Any Action Is

question 66

Multiple Choice

The opportunity cost of any action is

• A) all the possible alternatives given up.
• B) the highest-valued alternative given up.
• C) the benefit from the action minus the cost of the action.
• D) the dollars the action cost.

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Definitions:

Shipping Costs

Expenses associated with the transportation of goods from the supplier to the point of sale or end-user.

Contribution Margin

The amount remaining from sales revenues after all variable expenses have been deducted.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, i.e., they remain constant regardless of the level of production or sales.

Discontinue Department

The process or decision to eliminate a particular department or business unit that is not performing up to expectations or aligning with company strategy.