Beware of Allocated Fixed Costs Why should we keep the digital watch segment when its showing a 100K loss? The answer lies in the way we allocate common xed costs products. to our Our allocations can make a segment look less protable than it really is. Example: opportunity cost = the benet that is foregone as a result of pursuing some course of action. Opportunity costs are not actual dollar outlays and are not recorded in the formal accounts of an organization. special order = a onetime order that is not considered part of the companys normal ongoing business.