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

Answer:

Zero

Explanation:

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Answer:

D incremental cost to buy is less than the total cost to manufacture the part. 3 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.

Video Transcript

The opportunity cost is the nut benefit foregone from the best alternative views of the capacity here. It's mentioned the there's no alternative use four, the excess capacity, um, the fact that the factory and there is no gain or profit, hence the answer zero.

8 Product A-2071 is one of the joint products in a joint manufacturing process. Management is considering whether to sell A-2071 at the split-off point or to process A-2071 further into Xylene. The following data have been gathered:

I. Selling price of A-2071
II. Variable cost of processing A-2071 into Xylene.
III. The avoidable fixed costs of processing A-2071 into Xylene.
IV. The selling price of Xylene.
V. The joint cost of the process from which A-2071 is produced.

Which of the above items are relevant in a decision of whether to sell the A-2071 as is or process it further into Xylene?

A I, II, and IV.
B I, II, III, and IV.
C II, III, and V.
D I, II, III, and V.

17.

B)fixed manufacturing cost of the component. C)total manufacturing cost of the component. D)net benefit foregone from the best alternative use of the capacity required.

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