The Impact of Sunk Opportunity and Accounting Costs Assignment

The Impact of Sunk Opportunity and Accounting Costs - Assignment Example This means that for there to be an opportunity cost, there ought to be more than one form of option of financial based decision that needs to be made. Again, for there to be opportunity cost, there ought to be the weighing of the number of options available before selecting the best fitting or most profitable of the choices (Adams, 1997). Based on the outline given about opportunity cost above, there is a scenario that was experienced within my department that can be given to fit the meaning and implication of opportunity cost. There was a time that the company acquired new equipment and machinery to be used for heavy duty logistics purposes. The machinery was considered advanced and exotic to what had already been used within the company over the years. It was therefore important that the human resource department in which I belonged to at the time take steps towards getting people to operate and run the new machinery. At the time, there were known experts in a neighboring country who had adequate knowledge and experience in the use of the machinery. The first option for the company was therefore to import these skilled workers and employ them to be regular staff of the company. Among other things, the cost for doing this was to include the travel expense on these people, an international salary quotation that was to be given to them, expatriate benefits, and residential allowances. The other alternative was to train some of the existing employees to take up this role. The training was to last for 6 month s. The cost involved here however included time spent on not using the machinery immediately while these people were receiving training, the fee for the training program, and extra allowance for increased responsibility. Because there were costs involved in each of these cases, it was classified as an opportunity cost. Upon careful consideration, the company settled to go for option one, which was to