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) None of these is false.
D) Both of these are false.

Question

Quizplus · Accepted Answer

The statement in option B is false because while the differential analysis approach does not include fixed costs, it does not necessarily lead to underpricing in the long run. Special orders are typically evaluated based on their incremental impact, and fixed costs are often covered by regular sales.

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