An opportunity cost
A) should be initially recorded as an asset.
B) is the cost of a new product proposal.
C) is the potential benefit that may be obtained by following an alternative course of action.
D) is classified as manufacturing overhead.

Question

Quizplus · Accepted Answer

Opportunity cost is the cost of giving up the next best alternative when making a decision. It represents the potential benefit that could have been obtained by choosing an alternative course of action. It is not initially recorded as an asset and is not classified as manufacturing overhead. It is not specifically related to a new product proposal, but rather applies to any decision-making situation.

An Opportunity Cost