In new product planning and development, _____ costs refer not only to alternative uses of funds spent on product failures but also to the time spent in unprofitable product development.
A) sunk
B) direct
C) acquisition
D) opportunity

Question

Quizplus · Accepted Answer

Opportunity costs refer to the value of the best alternative forgone when a particular course of action is taken, and in new product planning and development, it refers to the cost of not pursuing other profitable opportunities due to resources being tied up in unprofitable product development. This includes both the funds spent on product failures as well as the time spent on development that could have been used on more profitable projects. Sunk costs, on the other hand, are costs that have already been incurred and cannot be recovered, while direct costs are costs that are directly attributable to the production of a product or service. Acquisition costs refer to the costs associated with acquiring a new asset or company.

In New Product Planning and Development, _____ Costs Refer Not