The Opportunity Cost of a Resource

question 148

Multiple Choice

The opportunity cost of a resource

• A)includes both explicit and implicit cost
• B)includes explicit cost only
• C)includes implicit cost only
• D)is equal to the market price of the resource
• E)is not related to the market price of the resource

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Definitions:

Cost Of Production Report

A document that details the total cost and production information for a specific period, often used in process costing systems.

Direct Labor

The term refers to the employees and labor cost directly associated with the manufacturing of goods, which includes workers who use the raw materials to build the product.

Process Costing

An accounting methodology used in manufacturing to allocate costs of production to individual units, suitable for homogenous products.

Conversion Cost

The combined cost of direct labor and manufacturing overheads incurred to convert raw materials into finished products.