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Please help and explain provide examples 2-A manager in your organization tells you over coffee one morning, "Differential costing is easy; variable

Please help and explain provide examples


2-A manager in your organization tells you over coffee one morning, "Differential costing is easy; variable costs are the only costs that are relevant." As the organization's accountant, how would you respond to this statement?


Later in your conversation this same manager opens a folder and produces a document he just received regarding a special order at a price that he believes is "below cost." The manager is opposed to accepting orders of this nature because he feels every sale needs to carry a fair share of full costs in order to keep the company from failing.


What would be your reply to this manager?

Top Answer

One should respond to this in the manner that variable cost are relevant to earning contribution, but contribution most equal... View the full answer

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