If a Special Order Results in a Positive Contribution Margin

question 15

Multiple Choice

If a special order results in a positive contribution margin of $8 when the contribution margin for regular orders is $15,which of the following decisions is the most likely to be chosen?

• A)Accept the order
• B)Reject the order
• C)Accept the order,but only if the customer agrees to an increase in the selling price to match the $15 regular contribution margin.
• D)Accept the order,but only if the customer agrees to an increase of $7 in the selling price

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Definitions:

Tension

A force that stretches a material, attempting to elongate it.

Shear

A strain resulting from forces causing parts of a material to slide past each other in opposite directions.

Confining

Pertaining to geological layers or conditions that restrict the flow of groundwater due to lower permeability.

Foliation

The planar arrangement of textural or structural features in metamorphic rocks and certain igneous rocks.