An Opportunity Cost Is Defined As

question 13

Multiple Choice

An opportunity cost is defined as:

• A)the increased cost incurred when a new project is accepted
• B)the increased sales of an existing product if a new product is added to a firm's offerings
• C)a cost that has been incurred and cannot be recouped
• D)the potential lost sales that are forfeited when a project is rejected
• E)the most valuable alternative that is given up if a particular investment is undertaken

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Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit of a product.

Break-even Point

The level of production or sales at which total revenues equal total expenses, and the business makes neither a profit nor a loss.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Break-even Point

The point at which total costs and total revenue are equal, meaning that there is no net loss or gain, and the business is not making a profit.