Opportunity cost
Opportunity cost is the value of the best alternative foregone when a resource is committed to a particular use. No invoice is raised for it, yet it represents a real economic cost.
Also known asopportunity costs
See it move
The infographic is a two-column comparison presenting two alternatives for the same block of 400 hours. The left column, 'Fill special order', shows that the order contribution must be reduced by the €3,000 opportunity cost of foregone rental income to arrive at the true net gain of €X − 3,000. The right column, 'Rent out 400 hours', yields a clean net gain of +€3,000 at zero additional cost; the card notes that no invoice is raised for the foregone rent, yet it must enter the relevant-cost calculation as a hard number.
Check yourself
A machine shop operates at full capacity. A new job offers a contribution margin of €4,200. Accepting it requires turning away an existing customer whose order generates €9,000 in revenue and €5,800 in variable costs. What is the opportunity cost of accepting the new job?