A Company Will Only Incur an Opportunity Cost for a Special

question 117

Multiple Choice

A company will only incur an opportunity cost for a special order when:

• A) There is no idle capacity
• B) The price of the order is less than its variable cost
• C) The cost of the order is greater than the average cost for current business
• D) There is no benefit from the special order

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Definitions:

Crown Gear Hub

A central part of a crown gear, connecting the gear to a shaft or other mounting mechanism.

Steering Knuckles

Pivot points in a vehicle's suspension system that connect the wheel hubs to the suspension and steering components, allowing wheels to turn.

Steer Axle

The front axle of a vehicle, which is connected to the steering mechanism, allowing the driver to control the vehicle's direction.

Tie Rod

A crucial component in the steering system of a vehicle that transmits force from the steering center link to the steering knuckle, enabling steering.