When evaluating a special order, management should: a. Only accept the order if the incremental revenue exceeds all product costs. b. Only accept the order if the incremental revenue exceeds fixed product costs. c. Only accept the order if the incremental revenue exceeds total variable product costs. d. Only accept the order if the incremental revenue exceeds full absorption product costs. e. Only accept the order if the incremental revenue exceeds regular sales revenue.

Question

Jazlyn Frey

Business

16 July, 10:47

When evaluating a special order, management should: a. Only accept the order if the incremental revenue exceeds all product costs. b. Only accept the order if the incremental revenue exceeds fixed product costs. c. Only accept the order if the incremental revenue exceeds total variable product costs. d. Only accept the order if the incremental revenue exceeds full absorption product costs. e. Only accept the order if the incremental revenue exceeds regular sales revenue.

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Answers (1)

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Madilynn Buchanan · Answer 1

The correct answer is c) Only accept the order if the incremental revenue exceeds total variable product costs

Explanation:

The management should be accepted only if the incremental revenue of the special order is higher than incremental costs and if present sales won't change.