A Company Is Within Plant Capacity

question 90

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 the 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:

Bargaining Power

The ability of one party in a negotiation to influence the outcome or terms in its favor due to its negotiating strength or advantages.

Economic Influence

The impact of economic factors, such as GDP, inflation rates, and unemployment, on businesses, individuals, and policy decisions.

Political Influence

The ability to shape or control the political actions, policies, or decisions of others, often through the use of positional power, resources, or negotiation.

Social Influence

Refers to the effect that the words, actions, or mere presence of other people have on our thoughts, feelings, attitudes, or behaviors.