Respuesta :
Answer:
The opportunity cost incurred by Bill Pope is his present salary.
The sunk cost incurred by Bill Pope is the cost of the industrial design course.
The variable costs incurred by Bill Pope are Material and Labor costs.
The fixed costs incurred by Bill Pope are Garage rent, Utilities, Equipment rented, and Advertising.
The MOH costs incurred by Bill Pope are Garage rent, Utilities, and Equipment rented.
The product costs incurred by Bill Pope are Garage rent, Utilities, Equipment rented, Material cost, and Labor cost.
The selling cost incurred by Bill Pope is the advertising cost.
The differential costs incurred by Bill Pope are Garage rent, Utilities, Equipment rented, Material cost, Labor cost, Present salary, and Advertising. That is, all the costs incurred by Bill Pope except the sunk cost.
Explanation:
Note: See the attached excel file for the completed chart.
Each of the costs is now explained as follows:
Opportunity cost: This refers to an alternative or benefit that is forgone or lost when another alternative is chosen. Therefore, the opportunity cost incurred by Bill Pope is his present salary.
Sunk cost: This can be described as an irrecoverable amount money that has an already spent or an irrecoverable expense incurred. Therefore, the sunk cost incurred by Bill Pope is the cost of the industrial design course.
Variable cost: This refers to a cost that changes or varies as the quantity of a product or service that is being produced changes. Therefore, the variable costs incurred by Bill Pope are Material and Labor costs.
Fixed cost: This refers to a cost that does not change or remains the same as the quantity of a product or service that is being produced changes. Therefore, the fixed costs incurred by Bill Pope are Garage rent, Utilities, Equipment rented, and Advertising.
Manufacturing overhead (MOH) cost: These refers to costs of manufacturing facilities incurred which are known as indirect costs of production apart from direct materials and direct labor costs in the production process. Therefore, the MOH costs incurred by Bill Pope are Garage rent, Utilities, and Equipment rented.
Product cost: This can be described as the costs incurred in order to create or produce a product. Therefore, the product costs incurred by Bill Pope are Garage rent, Utilities, Equipment rented, Material cost, and Labor cost.
Selling cost: This refers to costs that are incurred in order to create and sustain a demand for a product. Therefore, the selling cost incurred by Bill Pope is the advertising cost.
Differential cost: This is also referred to as incremental cost and it can be described as the difference between the cost of two alternatives. Therefore, the differential costs incurred by Bill Pope are Garage rent, Utilities, Equipment rented, Material cost, Labor cost, Present salary, and Advertising. That is, all the costs incurred by Bill Pope except the sunk cost.
