If a Company Has Excess Capacity and Present Markets Will

question 86

True/False

If a company has excess capacity and present markets will not be affected it would be profitable to accept an order at a special unit price even though the price is less than the unit variable cost to manufacture the item.

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Definitions:

Principal Debtor's Debt

The main amount of money that a debtor is obligated to pay back, excluding interest or additional fees.

Oral

Relating to the spoken word or communication by mouth, as opposed to written or non-verbal means.

Writing Requirement

A legal principle stating that certain kinds of contracts or agreements must be in writing to be enforceable.

Promissory Estoppel

A legal principle that prevents a party from retracting a promise which the other party has reasonably relied upon to their detriment.