Question

McAlister Company is operating at capacity and desires to add a new service to its rapidly expanding business. The service should be added as long as service revenues exceed: the sum of variable costs and any related opportunity costs. variable costs. the sum of variable costs, fixed costs, and any related opportunity costs. the sum of variable costs and fixed costs. fixed costs.

Answer 1

the sum of variable costs and any related opportunity costs

Step-by-step explanation:

They can add this new service given that this condition is met. As long as service revenue is greater than the sum of variable cost and any related opportunity cost. This is because it covers variable expenses.

If the situation is that a new service/division has been added, then the deciding factor would be if the new product or this division can cover for the various variable expenses that was incurred.