Nathan and Carla are members of the buying center for Bonny Bakes who are attending a sales presentation for a new ad campaign.During the meeting,Nathan says,"Carla,if instead of spending the $20,000 you're asking us to put into this new advertising idea,we put that money in a new packaging machine to replace the one in the Cartersville plant,we'll save $3,500 annually in maintenance and utility costs." Nathan is basing this objection on:
A) sunk costs.
B) variable costs.
C) opportunity costs.
D) fixed costs.
E) total costs.

Question

Quizplus · Accepted Answer

Nathan is referring to the potential benefits that could be lost if they invest in the new advertising idea instead of the new packaging machine. This is an example of opportunity cost, as the alternative option would result in savings of $3,500 annually.

Nathan and Carla Are Members of the Buying Center for Bonny