Asked by Claudiadavid Murillo on May 26, 2024
Verified
An opportunity cost
A) should be initially recorded as an asset.
B) is the cost of a new product proposal.
C) is the potential benefit that may be obtained by following an alternative course of action.
D) is classified as manufacturing overhead.
Opportunity Cost
The foregone benefit that would have been derived by an option not chosen.
Alternative Action
Potential different courses of action considered in a decision-making process.
- Ascertain the opportunity costs linked to make-or-buy decision-making.
Verified Answer
AK
Alaiin KanyiindaMay 29, 2024
Final Answer :
C
Explanation :
Opportunity cost is the cost of giving up the next best alternative when making a decision. It represents the potential benefit that could have been obtained by choosing an alternative course of action. It is not initially recorded as an asset and is not classified as manufacturing overhead. It is not specifically related to a new product proposal, but rather applies to any decision-making situation.
Learning Objectives
- Ascertain the opportunity costs linked to make-or-buy decision-making.
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