Opportunity Cost

question 58

Multiple Choice

Opportunity Cost:

• A) only includes explicit, out of pocket expenses.
• B) is the value of your next best alternative.
• C) is never provided in dollar values.
• D) would not include lost wages from working when deciding to take a vacation.

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Definitions:

Work-In-Process Inventory

Items in production that are not yet completed, considered a current asset on a company's balance sheet.

Finished Goods Inventory

Products that have completed the manufacturing process and are ready to be sold to customers.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as utilities, maintenance, and factory management salaries.

Raw Materials Inventory

Raw materials inventory consists of the basic materials and components a company holds that will be used in the production process to create finished goods.