The forgone contribution of resources, into the revenues because of not using the resources, in next best use is classified as __________?
Correct answer: C. opportunity cost
- A. in-source cost
- B. offshore cost
- C. opportunity cost
- D. outsource cost
Explanation
Opportunity cost is the contribution or benefit sacrificed when a resource is used for one purpose instead of its next best alternative. It is therefore a relevant cost in many decisions.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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