The opportunity cost of making a component part where there is no alternative use for the factory is:
The fixed manufacturing cost of the component.
The total manufacturing cost of the component.
Zero.
The total variable cost of the component.
Choice "C" is correct. Zero. If there is excess capacity, then it is not possible to have an opportunity cost because nothing is being foregone.Choices "b", "d", and "a" are incorrect, per above.
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