The opportunity cost of making a component part in a factory with no excess capacity is the :

CS Executive · Corporate and Management Accounting · PYQS · June 2024
The opportunity cost of making a component part in a factory with no excess capacity is the :
(A) Variable manufacturing cost of the component
(B) Cost of production given up in order to produce the component
(C) Total manufacturing cost of the component
(D) Net benefit given up from the best alternative use of the capacity

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Management Accounting

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