If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price it means that

Question

Aliza

Business

21 July, 05:15

If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price it means that

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Answers (2)

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Elsie Mcintyre · Answer 1

the order will likely be rejected.

Explanation:

The case new order to be accepted then more space to be rented / built. New machines to be purchased. More utilities expenses to be incurred and more workers are needed. Then both fixed and variable costs will be affected. Knowing that the selling price would be less than the usual then profit from the offer would be less than it should be.

Abraham Bishop · Answer 2

It means that the plant is being underpriced

Explanation:

If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price it means that the plant is being underpriced or would be underpaid.

Hence, the order will be rejected most certainly because no business is willing to run at a loss.