The Opportunity Cost of Producing a Particular Good Refers To

question 105

Multiple Choice

The opportunity cost of producing a particular good refers to:

• A) how much of something else must be given up to produce one additional unit of the good.
• B) how much of a good can be produced with the existing technology and resources.
• C) the total cost of production, including wages.
• D) the marginal cost of production.

---

Definitions:

Step-down Method

An allocation method used in cost accounting to assign overhead costs to different departments based on a hierarchical order.

Labor Hours

The total number of hours worked by employees for which they are compensated, often used as a basis for allocating overhead in cost accounting.

Space Occupied

The amount of physical area taken up by an entity, such as inventory in a warehouse or machinery in a factory.

Step-down Method

A method used in cost accounting to allocate service department costs to production departments in multiple steps, based on the services rendered.