Match each definition that follows with the term (a-e) it defines.
-Revenue forgone from an alternative use of an asset
A)Opportunity cost
B)Sunk cost
C)Theory of constraints
D)Differential analysis
E)Product cost distortion

Question

Quizplus · Accepted Answer

The definition given is that of opportunity cost, which is the cost of not choosing a certain alternative and instead choosing another alternative.

B) Sunk cost refers to costs that have already been incurred and cannot be recovered.

C) Theory of constraints is a management strategy that focuses on identifying and removing constraints that prevent a company from reaching its goals.

D) Differential analysis involves comparing the costs and benefits of two or more alternatives to determine the best course of action.

E) Product cost distortion occurs when the actual costs of producing a product are not accurately reflected in the product's cost.

Match Each Definition That Follows with the Term (A-E) It