When deciding to accept or reject a special order, which of the following costs is most likely to be irrelevant?
A)The wages of direct labor to make the order
B)Depreciation on the machinery used to make the order
C)The raw material used to make the order
D)The electricity used to run the machine to make the order

Question

Quizplus · Accepted Answer

Depreciation on the machinery used to make the order is likely to be irrelevant because it is a sunk cost and cannot be changed by accepting or rejecting the special order. The other costs listed (direct labor, raw materials, and electricity) are variable costs that will change depending on whether or not the order is accepted.

When Deciding to Accept or Reject a Special Order, Which