A Company Is Contemplating the Acceptance of a Special Order

question 127

Multiple Choice

A company is contemplating the acceptance of a special order. The order would not affect regular sales and could be filled without exceeding plant capacity. However, a new stamping machine would have to be purchased in order to stamp the customer's name on the product. Which of the following is likely?

• A) Total variable costs will be irrelevant.
• B) Only variable costs will be relevant.
• C) Only fixed costs will be relevant.
• D) Both variable and fixed costs will be relevant.

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Definitions:

Negatively Affects

To cause harm or reduction in quality, performance, or value.

Air Traffic

The movement of aircraft within the earth's atmosphere, controlled and regulated to ensure safety and efficiency.

Auctioning

the process of selling goods or services to the highest bidder through a competitive bidding process.

Direct Regulation

A method of regulation where government agencies set explicit rules or standards that restrict certain actions or outcomes, often involving monitoring and enforcement.