Derek is performing incremental analysis in a makeor-

buy decision for Item X. If Derek buys Item X, he can use its released productive capacity to produce Item Z. Derek will sell Item Z for $12,000 and incur production costs of $8,000. Derek’s incremental analysis should include an opportunity cost of:

(a) $12,000.

(c) $4,000.

(b) $8,000.

(d) $0.

AppendixLO1