Opportunity cost = Return from alternative investment = $305,000 Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Blooms: Apply Difficulty: 1 Easy Learning Objective: 02-07 Understand cost classifications used in making decisions: differential costs; opportunity costs; and sunk costs. Essay Questions 181. A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it. 1. Cost of a measles vaccine administered at an outpatient clinic at a hospital; The outpatient clinic; Direct 2. Cost of a replacement battery installed in a car at the auto repair shop of an automobile dealer; The auto repair shop; Direct 3. Accounting professor's salary; A particular class; Indirect 4. Cost of electronic navigation system installed in a yacht at a yacht manufacturer; A particular yacht; Direct 5. Cost of wiring used in making a personal computer; A particular personal computer; Indirect 6. Supervisor's wages in a computer manufacturing facility; A particular personal computer; Indirect 7. Cost of lubrication oil used at the auto repair shop of an automobile dealer; The auto repair shop; Direct 8. Cost of heating a hotel run by a chain of hotels; A particular hotel guest; Indirect 9. Cost of heating a hotel run by a chain of hotels; The particular hotel; Direct 10. Cost of tongue depressors used in an outpatient clinic at a hospital; A particular patient; Indirect
Opportunity cost = Return from alternative investment = $305,000 Analytic AICPA BB: Critical Thinking AICPA FN: Decision Making Blooms: Apply Difficulty: 1 Easy Learning Objective: 02-07 Understand cost classifications used in making decisions: differential costs; opportunity costs; and sunk costs. Essay Questions 181. A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it. 1. Cost of a measles vaccine administered at an outpatient clinic at a hospital; The outpatient clinic; Direct 2. Cost of a replacement battery installed in a car at the auto repair shop of an automobile dealer; The auto repair shop; Direct 3. Accounting professor's salary; A particular class; Indirect 4. Cost of electronic navigation system installed in a yacht at a yacht manufacturer; A particular yacht; Direct 5. Cost of wiring used in making a personal computer; A particular personal computer; Indirect 6. Supervisor's wages in a computer manufacturing facility; A particular personal computer; Indirect 7. Cost of lubrication oil used at the auto repair shop of an automobile dealer; The auto repair shop; Direct 8. Cost of heating a hotel run by a chain of hotels; A particular hotel guest; Indirect 9. Cost of heating a hotel run by a chain of hotels; The particular hotel; Direct 10. Cost of tongue depressors used in an outpatient clinic at a hospital; A particular patient; Indirect
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