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) Amortization on existing production equipment
D) Incremental fixed costs associated with the order

Question

Quizplus · Accepted Answer

Incremental fixed costs associated with the order are relevant because they are additional costs that will be incurred only if the special order is accepted. These costs would not exist if the order is not accepted, making them directly relevant to the decision.

In Making a Special Order Decision, Which of the Following