What Is the Opportunity Cost of Making a Component Part

question 2

Multiple Choice

What is the opportunity cost of making a component part in a factory with no excess capacity?

• A) Variable manufacturing cost of the component.
• B) Fixed manufacturing cost of the component.
• C) Cost of the production given up in order to manufacture the component.
• D) Net benefit foregone from the alternative use of the capacity requireD.

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Definitions:

Decision Making

The process of identifying and selecting alternatives based on the values and preferences of the decision maker.

Telepresence

Technology that allows a person to feel or appear as if they are present in a location different from their actual one, often used for remote communication or control.

Virtual Meeting

A virtual meeting is a gathering of individuals in different locations using video, audio, and text messaging technologies over the internet to communicate and collaborate in real-time.

Efficiency Rate

A measurement of the ability to accomplish a task with a minimal amount of waste, effort, or inefficiency.