If a company is presented with a decision to accept a special order, if it is already operating at full-capacity, and in order to accept the special order, would need to expand its capacity, which of the following will most likely to happen in the decision analysis?
A) Unit variable costs will increase.
B) Fixed costs will not be affected.
C)Both variable and fixed costs will be need to be considered.
D) The company should accept the order.

Question

Quizplus · Accepted Answer

If a company is presented with a decision to accept a special order, if it is already operating at full-capacity, and in order to accept the special order, would need to expand its capacity, then both the variable and fixed costs will need to be considered in the decision analysis.

If a Company Is Presented with a Decision to Accept