Opportunity Costs in Production Full Cost Accounting: A Systematic Literature Review

Increased product variety driven by shorter lifecycles, individualization, and mass customization causes inefficiencies in production, such as frequent changeovers and higher stock levels. Production full cost accounting supports the identification of inefficiencies and enables the economic sustainability of production by providing transparency across all production related costs. However, conventional production full cost accounting does not properly account for inefficiencies. As product variety increases, inefficiencies rise exponentially, contributing to opportunity costs. Opportunity costs represent revenue losses resulting from nonproductive utilization of production resources. To accurately assess production costs and optimize production resource utilization, opportunity costs due to product variety must be included in production full cost accounting. Neglecting opportunity costs distorts cost assessments, leads to uneconomic portfolio decisions, and reduces production efficiency. For this purpose, this paper conducts a systematic literature review to identify approaches for opportunity costs in production. The findings categorize relevant cost types and outline how opportunity costs are addressed in production full cost accounting. Based on the categorization, novel cost types are proposed to quantify opportunity costs in production full cost accounting, and research gaps are identified. Extending the scope of production full cost accounting contributes to more accurate cost assessments and long-term economic sustainability.