Suppose Your College Institutes a New Policy Requiring You to Pay

question 142

Multiple Choice

Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot.

• A)The cost of the parking permit is not part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
• B)The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
• C)Only half of the cost of the parking permit is part of the opportunity cost of attending college.
• D)The cost of the parking permit is not part of the opportunity cost of attending college under any circumstances.

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Definitions:

Work in Process

includes products that are in the production process but are not yet completed.

FIFO Method

An inventory valuation method that assumes the first items placed in inventory are the first sold.

Conversion Costs

The costs incurred in the process of converting raw materials into finished goods, including direct labor and manufacturing overhead expenses.

FIFO Method

A method of inventory valuation where the first items purchased or produced are the first ones sold, used in costing inventory.