Under the Opportunity Cost Approach, the Cost of Each Alternative

question 73

True/False

Under the opportunity cost approach, the cost of each alternative includes the incremental costs and the opportunity cost.

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Definitions:

Direct Labor Budget

A detailed plan that shows the direct labor-hours required to fulfill the production budget.

Required Production

The quantity of goods or products a company needs to produce to meet its planned sales demand.

Production Budget

An estimate of the total units of production needed to meet anticipated sales demand and inventory requirements.

Sales Budget

A detailed schedule showing expected sales expressed in both dollars and units.