If a firm uses accountancy cost concepts that are not based on opportunity cost, then it will only be by chance if it succeeds in maximising profits.

Question

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Opportunity cost is crucial for making decisions that maximize profits because it represents the benefits a firm misses out on when choosing one alternative over another. Without considering opportunity costs, a firm may not accurately assess the true cost of its decisions, potentially leading to suboptimal choices that do not maximize profits.

If a Firm Uses Accountancy Cost Concepts That Are Not