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:

Supportive

Providing assistance, encouragement, or emotional help to others in a way that promotes a positive environment or outcome.

Corrective

Designed to correct or rectify an error, fault, or undesirable outcome, often through specific interventions or adjustments.

Feedback

Information provided about reactions to a product, a person's performance of a task, etc., used as a basis for improvement.

Feedback Timely

Relates to the promptness with which feedback is delivered, ensuring that it is given in a time frame that is relevant and useful for the recipient.