In special order decisions, management should ensure that special order prices exceed:______.

Question

01-01-2021
Business

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In special order decisions, management should ensure that special order prices exceed:______.

Sagot :

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Parrainidn Parrainidn · Answer 1 · 2021-01-02T19:25:40-05:00

Answer: Variable costs

Explanation:

Special orders as the term implies are those that fall out of the regular production schedule but rather were specifically requested for by a customer.

As these are specifically requested or are an extra order, for profit to be made, the cost of this order must exceed the variable costs attached to it. The fixed cost would have already been taken care of by the normal production schedule so does not need to be considered.

Sagot :

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