The Notion of Opportunity Cost

question 52

Multiple Choice

The notion of opportunity cost:

• A)applies to consumers, but not to businesses
• B)applies to businesses, but not to consumers
• C)is relevant to economies of all ideological persuasions
• D)would disappear if we were able to eliminate poverty
• E)does not apply to governments

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and the cost of goods sold based on the average cost of all units available for sale during the period.

Equivalent Units

A concept in cost accounting that converts partially completed goods into a number of completed units for inventory valuation.

Materials

Raw inputs or supplies that are converted into finished products through the manufacturing process.

FIFO Method

"First In, First Out", an inventory valuation method where the first items placed into inventory are the first sold, affecting the cost of goods sold and inventory value.