Opportunity costs are relevant costs, Cost Accounting

Opportunity Costs Are Relevant Costs

Opportunity cost introduces an additional concept that is not available like part of normal cost analysis in the accounting record system. Opportunity cost may be defined by 'the best opportunity foregone via following a specific course of action' it may be redefined with the net cash flow lost via choosing one alternative quite than another. Opportunity cost may be essential in a number of decision making situations wherever an alternative option between possible futures courses of action examples are is as:

a) Whether to close a department instantly or in one year's time

b) Whether to operate an internal service department or to employ an outside service

c) Whether to accept one or another of two jointly exclusive contracts

Opportunity costs will be part of an incremental cost and revenue analysis in many type of decision making conditions.

Posted Date: 2/7/2013 1:51:52 AM | Location : United States







Related Discussions:- Opportunity costs are relevant costs, Assignment Help, Ask Question on Opportunity costs are relevant costs, Get Answer, Expert's Help, Opportunity costs are relevant costs Discussions

Write discussion on Opportunity costs are relevant costs
Your posts are moderated
Related Questions

The controller for U.S. Route 66 Truck Parts is comparing traditional overhead allocationwith ABC. After studying both approaches, the controller prepared the following list of fea

MARGINAL COSTING AND DIFFERENTIAL COSTING 1.     Differential costing can be used both in case of marginal costing and absorption costing. 2.     In case of marginal costing

Capability Maturity Model Integration (CMMI) is a process development approach that gives organizations with the essential elements of effective processes. It can be used to gui

what is the importance and assumptions of application of marginal costing



what are the classifications of labour costs? what is employee psyche?


A  firm of printers  is contemplating  joining  the uniform  costing  system operated by  its Trade Association but the Managing Director is dubious about the benefits of becoming