When There Is an Excess Capacity, It Makes Sense to Accept

question 169

Multiple Choice

When there is an excess capacity, it makes sense to accept a one-time-only special order for less than the current selling price if ________.

• A) incremental revenues exceed incremental costs
• B) additional fixed costs is incurred to accommodate the order
• C) the company placing the order is in the same market segment as your current customers
• D) incremental revenue equals incremental operating income

Analyze the repercussions of adopting absorption or variable costing on a firm’s income statement and balance sheet.

Recognize the role of step-fixed costs and their implications on cost accounting and management decisions.

Understand the historical impact of industrial activities on the environment and the legal responses to environmental damage.

Comprehend the concept of efficient adaptation strategies for mitigating the effects of global warming.

---

Definitions:

Abnormal Behavior

Actions, feelings, or thoughts that are atypical, significantly deviate from societal norms, and may impair functioning.

Major Depression

A mental condition characterized by an enduring depressed state or a loss of interest in once pleasurable activities, leading to significant disruption in daily living.

Symptoms

Observable signs or indications of a disease or disorder experienced by an individual.

Abnormal Behavior

Patterns of emotion, thought, or action deemed pathological for cultural, societal, or situational contexts, often causing distress or dysfunction.