In Making a Special Order Decision, Which of the Following

question 113

Multiple Choice

In making a special order decision, which of the following is a relevant fixed cost?

• A) Incremental fixed costs associated with current business
• B) Contribution margin of any current business replaced
• C) Depreciation on existing production equipment
• D) Incremental fixed costs associated with the order

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Definitions:

Standard Normal Random Variable

A random variable with a mean of zero and a standard deviation of one, following the standard normal distribution, which is a specific instance of the normal distribution.

Average Balance

Average balance is a financial term referring to the sum of all balances during a certain period divided by the number of days in that period, often used in banking to assess fees or determine interest.

Standard Deviation

An evaluation of how spread out or dispersed a collection of data points is.

Normally Distributed

A data distribution pattern that follows the normal (bell curve) distribution.