The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is:
A. the variable manufacturing cost of the component.
B. the total manufacturing cost of the component.
C. the fixed manufacturing cost of the component.
D. zero.
Which of the following costs are always irrelevant in decision making?
A. avoidable costs
B. sunk costs
C. opportunity costs
D. fixed costs
Costs that can be eliminated in whole or in part if a particular business segment is discontinued are called:
A. sunk costs.
B. opportunity costs.
C. avoidable costs.
D. irrelevant costs.
Accepting a special order will improve overall net operating income if the revenue from the special order exceeds:
A. the contribution margin on the order.
B. the incremental costs associated with the order.
C. the variable costs associated with the order.
D. the sunk costs associated with the order.