Accepting a Special Order Will Improve Overall Net Operating Income

question 230

Multiple Choice

Accepting a special order will improve overall net operating income if the revenue from the special order exceeds:

• A) the contribution margin on the order.
• B) the incremental costs associated with the order.
• C) the variable costs associated with the order.
• D) the sunk costs associated with the order.

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Definitions:

Transform Fault

A type of fault where two tectonic plates slide past one another horizontally, often causing earthquakes.

Lahars

Volcanic mudflows or debris flows composed of a slurry of pyroclastic material, rocky debris, and water, that flow down from a volcano, often following a volcanic eruption.

Basaltic Lava

A type of molten rock that is low in silica and flows easily, typically forming smooth, broad volcanic features.

Shield Volcano

A type of volcano with broad, gently sloping sides, built by the eruption of low-viscosity lava that can flow long distances.