Snapper Tool Company Has Plenty of Excess Capacity to Accept

question 142

Multiple Choice

Snapper Tool Company has plenty of excess capacity to accept a special order. Shown below is an "what-if" analysis of the special order. Which of the following is the correct decision and reason?

• A) Yes, since the goal is to fill capacity as much as possible to keep fixed overhead variances as low as possible.
• B) No, the company will only break even.
• C) No, since only the employees will benefit from this in that they will earn more overtime.
• D) Yes, since operating profits will most likely increase.

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