Dexter Decides to Buy a New Smartphone and Offset the Cost

question 122

Multiple Choice

Dexter decides to buy a new smartphone and offset the cost by selling his old phone to one of his friends.His friend has no money and wants to barter for the old phone.Dexter's preference for the items offered is in this order: laser printer,television,headphones,and bicycle.If Dexter accepts the laser printer as payment,what is his opportunity cost of this exchange?

• A) the total value of the television,headphones,and bicycle
• B) the difference between the value of the old phone and that of the new smartphone
• C) There is no opportunity cost in a consensual trade.
• D) the value of the laser printer
• E) the value of the television

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Definitions:

Standard Machine Setups

This term refers to the predetermined arrangements and settings on machinery for standard operations, aiming to minimize setup time and costs.

Standard Variable Overhead Rate

The predetermined rate at which variable overhead costs are expected to occur relative to a specific activity or cost driver.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies with production volume.

Variable Overhead Efficiency Variance

Variable overhead efficiency variance is the difference between the actual and budgeted variable overhead cost based on the efficient utilization of resources.