Which of the following statements regarding special orders is (are)false? (A)The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated with the order.
(B)The differential analysis approach to pricing for special orders will always lead to underpricing in the long-run because fixed costs are not included in the analysis.
A)Only A.
B)Only B.
C)Neither A nor B is false.
D)Both A and B are true.

Question

Quizplus · Accepted Answer

Statement (A) is true, as the primary decision for special orders is indeed determining whether the differential revenue is greater than the differential costs associated with the order. However, statement (B) is false, as the differential analysis approach to pricing for special orders may actually lead to overpricing in the long-run if fixed costs are included in the analysis.

Which of the Following Statements Regarding Special Orders Is (Are)false