Opportunity costs are relevant costs, Cost Accounting

Assignment Help:

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.


Related Discussions:- Opportunity costs are relevant costs

What is the original cost of the auto?, I'm having a hard time with this, c...

I'm having a hard time with this, can you please help? I know the dates are imparative also in finding the solution. Stevens purchased an auto on Jan 1, 2001. On December 31, 2003

introduction of internal rate of return , Introduction of Internal Rate of...

Introduction of Internal Rate of Return The traditional internal rate of return (IRR) method of project selection has been shown to be inferior to the NPV method due to vario

Cost variance and schedule variance, (i) In terms of cashflow, which month ...

(i) In terms of cashflow, which month will be the most costly for your project? (ii) If the 3rd and 4th months are more expensive by 25% each because the outsourced labour took

Calculate what variances have arisen, The following details were extracted ...

The following details were extracted from the standard cost card of a component:       Raw Materials              2.82 Kgs @ Rs.4.80 Kg.     Direct Labour            Type I   6

Break-even analysis, Break-Even Analysis Break-even point is the volum...

Break-Even Analysis Break-even point is the volume of sales at that there is no loss or. Break-even charts graphically show the relationship of cost to profits and volume and

Fixed overhead variance (fov), F ixed Overhead Variance (FOV) Fixed...

F ixed Overhead Variance (FOV) Fixed overhead variance has been described by ICMA, London, as 'the variation between the standard cost of fixed overhead absorbed in the pro

Calculate the cost per unit for products, Chemical Recovery Company uses co...

Chemical Recovery Company uses common machinery to manufacture two products.  Each year, the company has a total of four productions runs, which is two production runs for each pro

Features of jit, What are the major features of JIT?

What are the major features of JIT?

Types of variances, TYPES OF VARIANCES Variances are computed for the e...

TYPES OF VARIANCES Variances are computed for the entire three basic elements of cost - direct labour, direct material, and overhead variance 1. Direct labour variance 2.

Compute the second years tax amortization, Smith Corporation purchased an i...

Smith Corporation purchased an intangible asset for $110,000. Compute the second year's tax amortization. The second year would be a full year's amortization. The company estimates

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd