Special Order Decisions Should Be Made Using Variable Costing Because

question 141

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.
• E)Fixed overhead costs will change as a result of the special order.

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Definitions:

Peripheral Route

A method of persuasion that relies on superficial cues or emotional appeal rather than logical argumentation, as outlined in the Elaboration Likelihood Model.

Heuristics

Mental shortcuts, or rules of thumb, that are used for making judgments and decisions.

Sleeper Effect

A delayed increase in the effect of a message that follows a period of discounting or ignoring the message.

Primacy Effect

The phenomenon that the first items presented in a series are more likely to be remembered than items in the middle.