sales are considered in the factoring method because factoring specifically deals with the receivables (money owed from sales on credit). The opportunity cost is calculated based on the value of sales (what is tied up in receivables), not the total cost of producing the goods. This reflects the potential return the business could earn if it didn't have its money tied up in outstanding invoices.
In contrast, for other costs (like inventory), we use total cost because it's the overall financial investment in the asset that matters.
