Which of the Following Is True If a Company Can

question 183

Multiple Choice

Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity?

• A) Net income will not be affected.
• B) Net income will increase if the special sales price per unit exceeds the unit variable costs.
• C) Net income will decrease.
• D) Additional fixed costs will probably be incurred.

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Definitions:

Appellate Courts

Courts that have the authority to review and change outcomes of decisions made by lower courts.

Common Law

A body of law derived from judicial decisions of courts and similar tribunals, rather than from statutes or written legislation.

Statutory Law

Law established by enacting statutes or legislation, as opposed to common law or case law.

Binding Precedent

A legal principle established in a previous case that must be followed by all lower courts in the same jurisdiction in cases with similar circumstances.