Special Order Decisions Should Be Made Using Variable Costing Because

question 190

Multiple Choice

Special order decisions should be made using variable costing because:

• A) Special order decisions usually focus on fixed costs
• B) Variable costing includes all overhead costs in the calculation of product costs.
• C) Only variable costs will increase as a result of the special order.
• D) All costs, including variable and fixed costs, must be covered by the special order pricing.

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Definitions:

Exports

Exports refer to goods or services produced in one country and sold to buyers in other countries, contributing to the exporting country's economy.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees.

Manufacturing

The activities and processes used in making tangible products; also called production.