# Question

A computer manufacturer is deciding whether to produce a large monitor with a thin screen. One of the managers suggested that the incremental costs for this line of manufacturing will be primarily variable because the company currently has a lot of idle capacity.

REQUIRED

A. What is the cost object in this decision?

B. Is the accounting system likely to have the information needed to develop a cost function?

Explain.

C. What might be an appropriate estimation technique for this cost? Explain.

D. What is the opportunity cost for using this idle capacity? Explain.

REQUIRED

A. What is the cost object in this decision?

B. Is the accounting system likely to have the information needed to develop a cost function?

Explain.

C. What might be an appropriate estimation technique for this cost? Explain.

D. What is the opportunity cost for using this idle capacity? Explain.

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