Pregunta
Which of the following statements regarding special orders is true?
Multiple Choice
The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated
with the order.
The differential analysis approach to pricing for special orders could lead to overpricing in the long run because fixed costs are
included in the analysis.
Special orders are usually long-term commitments that impact other sales.
Special orders are usually short-run occurrences and must include full product costs in the analysis.
Multiple Choice
The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated
with the order.
The differential analysis approach to pricing for special orders could lead to overpricing in the long run because fixed costs are
included in the analysis.
Special orders are usually long-term commitments that impact other sales.
Special orders are usually short-run occurrences and must include full product costs in the analysis.
Ask by Bob Fleming. in the United States
Mar 29,2025
Solución de inteligencia artificial de Upstudy
Respuesta verificada por el tutor
Responder
The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated with the order.
Solución
- Compute the differential revenue
and the differential cost for the special order. The decision rule is to accept the order if
-
This analysis considers only those costs and revenues that will change as a result of the order. Fixed costs, which are typically sunk in the short run, are not considered.
-
Special orders are usually one-time or short-run decisions and do not typically impact the full product costs that include fixed overhead.
-
Therefore, the correct statement is:
Respondido por UpStudy AI y revisado por un tutor profesional
Como
error msg
Explicar 
Simplifique esta solución Mind Expander
The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated with the order. This means you’ll want to analyze how much additional income the special order can bring in compared to any extra costs incurred, helping to ensure that the order is worth accepting.
In practice, special orders often arise during short-term situations, like when a customer requests a one-time purchase at a lower price. A crucial mistake here would be to focus solely on fixed costs; instead, focusing on variable costs and contribution margins can lead to smarter decision-making without creating a long-term pricing issue.
¡Prueba Premium ahora!
¡Prueba Premium y hazle a Thoth AI preguntas de matemáticas ilimitadas ahora!
Quizas mas tarde
Hazte Premium
