True or false.

1. Special orders increase income if the revenue from the order does not exceed the incremental variable and fixed costs incurred to fill the order.

2. In deciding whether to accept a special sales order, any fixed costs that would remain unchanged are considered relevant data.

3. Variable costs are irrelevant to a special decision when those variable costs differ between alternatives.

4. Managers should consider the potential effect of a special order on long-run profits and operations.

5. When deciding whether to accept a special order, managers need to consider whether they have available excess capacity.

Answer rating: 100% (QA)

1 False ... View the full answer