When a company does NOT have sufficient capacity to fill an order for less than the current selling price, what additional factor must be taken into consideration?
A)The decision process is the same whether there is sufficient capacity or not.
B)How will the lack of capacity affect the quality of the product?
C)Can resources be transferred from producing product to sell at the current price to producing product at the special price?
D)opportunity costs

Question

Quizplus · Accepted Answer

When a company does not have sufficient capacity to fill an order for less than the current selling price, the additional factor that must be taken into consideration is the opportunity cost of producing the special order instead of producing and selling products at the current price. The company must weigh the potential profit of the special order against the potential profit of producing and selling products at the current price, as well as the cost of using resources to produce the special order.

When a Company Does NOT Have Sufficient Capacity to Fill