When a decision is made among a number of alternatives, the potential benefit that is lost by choosing one alternative over another is the:
A)realized cost.
B)accrued cost.
C)conversion cost.
D)opportunity cost.

Question

Quizplus · Accepted Answer

Opportunity cost is the potential benefit that is lost by choosing one alternative over another. Realized cost refers to the actual cost incurred, accrued cost is the cumulative cost over a period of time, and conversion cost refers to the cost of converting raw materials into finished products. Therefore, the best choice is D – opportunity cost.

When a Decision Is Made Among a Number of Alternatives