Cost Accounting, Student Value Edition (15th Edition)
Cost Accounting, Student Value Edition (15th Edition)
15th Edition
ISBN: 9780133428858
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
Question
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Chapter 11, Problem 11.33P

1.

To determine

Operating income:

The outcome of deduction of operating expense and depreciation from the gross income is called as operating income. The operating income realized before any payment pertaining to interest and taxes payable.

Opportunity cost:

Opportunity cost is total of potential income and other benefits that are lost due to rejection of alternatives. These costs are considered to evaluate the multiple project or options available.

To identify: Opportunity cost for the foregoing the 2 prom contract’

2.

To determine

To identify: the lowest amount that should be bid

3.

To determine

To identify: the preference to rent two cars or to cancel either of the order

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