Fixed costs will affect a special order decision when the selling company is at capacity.

Question

Quizplus · Accepted Answer

If a company is already operating at full capacity, taking on a special order will require additional expenses to be incurred, such as overtime or additional materials. These added costs will increase the company's fixed costs and can impact the profitability of the special order. Therefore, fixed costs must be considered in the decision-making process for accepting special orders.

Fixed Costs Will Affect a Special Order Decision When the Selling