In Considering a Special Order That Will Enable a Company

question 140

Multiple Choice

In considering a special order that will enable a company to make use of presently idle capacity,which of the following costs would be irrelevant?

• A)Materials
• B)Depreciation
• C)Direct Labor
• D)Variable Overhead

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Definitions:

Holder in Due Course

A legal term describing a party who has acquired a negotiable instrument in good-faith and for value, and thus has certain rights above the original payee, especially in terms of enforcing payment.

Fair Value

An estimate of the market value of an asset, determined by mutual agreement between a willing buyer and seller, each possessing adequate information.

Good Faith

Acting with honesty and without the intention to defraud or to seek an unfair advantage.

Without Alteration

A term referring to maintaining the original state or condition of something without any changes or modifications.