56.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, then a.only variable costs are relevant.b.fixed costs are not relevant.c.the order will likely be accepted.d.the order will likely be rejected.Ans: D, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Resource Management, AICPA FN: Decision Modeling, AICPA PC: Problem Solving, IMA: Business Economics 57.Miley, Inc. has excess capacity. Under what situations should the company accept a special order for less than the current selling price? 58.If a company must expand capacity to accept a special order, it is likely that there will be 21 - 12
Incremental Analysis 59.Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity? 60.If a company anticipates that other sales will be affected by the acceptance of a special order, then a.lost sales should be considered in the incremental analysis.b.lost sales should not be considered in the incremental analysis.c.the order should not be accepted.d.the order will only be accepted if the plant is below capacity.Ans: A, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Resource Management, AICPA FN: Decision Modeling, AICPA PC: Problem Solving, IMA: Business Economics
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