When Deciding to Accept a One-Time-Only Special Order from a Wholesaler,management

question 37

Multiple Choice

When deciding to accept a one-time-only special order from a wholesaler,management should do all of the following EXCEPT:

• A)analyze product costs.
• B)consider the impact of the special order on future prices of their products.
• C)determine whether excess capacity is available.
• D)verify past design costs for the product.

Understand the role and importance of direct labor and machine time in product cost calculation.

Comprehend the theoretical concepts behind cost allocation, including insulating versus noninsulating allocations.

Analyze the reasons behind allocating internal costs and the criteria for a sound allocation system.

Understand the concept of monopolistic competition and its implications on pricing and output.