Opportunity Cost

Opportunity apostrophize for finish making: A dogma method resource to describe the difficulties of practice INTRODUCTION: The difficulties associated with the mapping of opportunity price as a stopping floor making aid atomic number 18 more often than not not discussed in the management accounting connect texts. only most of the new management texts devote at least some coverage to the calculation of relevant cost and benefits for the ending making, and normally the concept of opportunity cost is apply as an integral part of this coverage. Opportunity cost is be by many of the economists, but the main focus of all unitary of them is on the contribution or profit that is forgone (rejected) by using coifed resources for particular purpose. OC remains at the nervus of study of decision making today, it being seen as serviceable both in the calculation of merit of competing ersatzs and as a way describing the preferred alternatives. This research paper com prises of following(a) parts: Strengths and demarcation line of Opportunity Cost. A worked example that elaborate the difficulties which may limit OC as a practical decision aid. An alternative silver flow approach that overcome the difficulties by the use of OC approach. word of honor and Conclusions.

STRENGTHS AND LIMITATIONS OF OPPURTUNITY COST: As a decision making aid, OC is commonly seen to have three areas of strength: 1.It forces term of all alternative course of action 2.It is a convenient, expedient and stinting technique of analysis 3.It has certain communication advantages. It can highlig ht the boilers cause benefit of a particul! ar decision. Exploring of the above strengths are as follows: ?Decisions are concerned with choices between alternatives and, consequently, any method of nonplus costs and revenues for decisions which attempts to deal with opportunities in isolation is unlikely to visualize a complete analysis.The main importance of the opportunity-cost concept is that it forces the decision...If you wishing to get a full essay, order it on our website: OrderCustomPaper.com

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