If a Special Order Results in a Positive Contribution Margin

question 137

Multiple Choice

If a special order results in a positive contribution margin of $8 when the contribution margin for regular orders is $15, which of the following decisions is the most likely to be chosen?

• A)Accept the order, because $8 per unit is generated as profit
• B)Reject the order, because $7 per unit is lost
• C)Accept the order, but only if the customer agrees to an increase in the selling price to match the $15 regular contribution margin
• D)Accept the order, but only if the customer agrees to an increase of $7 in the selling price

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Definitions:

Decision-Making Process

The cognitive and logical sequence of steps by which individuals select among options and take action.

Communication Improvement

Communication improvement involves enhancing the effectiveness and efficiency of conveying information and understanding between individuals or groups.

Reciprocal Goal

A mutual agreement or shared aim between two or more parties, particularly in a counseling or therapeutic context, to work towards a common objective.

Interrupting

The act of stopping a process or activity temporarily or permanently, often used in communication as a method to clarify or redirect conversation.