A Company Is Within Plant Capacity

question 74

Multiple Choice

A company is within plant capacity.It is contemplating whether a special order should be accepted.The order will not impact regular sales.If the company accepts a special order, what will occur?

• A)Incremental costs will not be affected.
• B)Net income will increase if the special sales price per unit exceeds the unit variable costs.
• C)There are no incremental revenues.
• D)Both fixed and variable costs will increase.

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Definitions:

Form 2106

A tax form used by employees to deduct work-related expenses not reimbursed by their employer when such expenses exceed 2% of their adjusted gross income.

Schedule C

A tax form used by sole proprietors in the United States to report their business income and expenses to the IRS.

Form 1040

The routine IRS document prepared by individuals to declare their income for the tax year on an annual basis.

Qualified Education Loan

A loan taken out solely to pay qualified higher education expenses for the borrower, the borrower's spouse, or the borrower's dependent.