You Have Driven 800 Miles on a Vacation and Then

question 80

Multiple Choice

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about,but would really like to see.In computing the opportunity cost of visiting this attraction you had not planned to visit,you should include

• A)both the cost of driving the first 800 miles and the next 15 miles.
• B)the cost of driving the first 800 miles,but not the cost of driving the next 15 miles.
• C)the cost of driving the next 15 miles,but not the cost of driving the first 800 miles.
• D)neither the cost of driving the first 800 miles nor the cost of driving the next 15 miles.

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Definitions:

CVP Model Assumptions

Assumptions underlying Cost-Volume-Profit analysis, including constant sales price, variable and fixed costs, and operating efficiency.

Model Usefulness

The effectiveness and practicality of a theoretical model in explaining, predicting, or making decisions in real-world situations.

Operating Leverage Factor

A measure that assesses the degree to which a company can increase operating income by increasing revenue, highlighting the fixed versus variable costs structure.

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.