Which of the following statements is correct if a company accepts a special order without having to add capacity or affecting current sales?
A) Operating income will not be impacted.
B) Operating income will decrease if the special-order unit selling price is less than the total unit cost.
C) Operating income will increase if the special-order unit selling price is greater than the unit variable cost.
D) Fixed costs will increase.

Question

Quizplus · Accepted Answer

Operating income will increase if the special-order unit selling price is greater than the unit variable cost because the company can cover the variable costs and contribute to fixed costs and profit without affecting current operations.

Which of the Following Statements Is Correct If a Company