When There Is an Excess Capacity, It Makes Sense to Accept

question 169

Multiple Choice

When there is an excess capacity, it makes sense to accept a one-time-only special order for less than the current selling price if ________.

• A) incremental revenues exceed incremental costs
• B) additional fixed costs is incurred to accommodate the order
• C) the company placing the order is in the same market segment as your current customers
• D) incremental revenue equals incremental operating income

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Definitions:

Emotional Reactions

Responses that involve emotional components, such as feeling happy, sad, angry, or afraid in reaction to stimuli.

Phineas Gage

A case study in neuroscience about a man who survived a severe brain injury in the 19th century, providing insights into the relationship between brain function and personality.

Personality

A complex pattern of characteristics, traits, and behaviors that distinguishes one individual from another and affects how they interact with the world.

Behavior

The actions or reactions of an object or organism, often in relation to its environment.