Question: If there is excess capacity, the minimum acceptable price for a special order must cover: A. Only variable costs associated with the special order.

If there is excess capacity, the minimum acceptable price for a special

order must cover: A. Only variable costs associated with the special order.

If there is excess capacity, the minimum acceptable price for a special order must cover: A. Only variable costs associated with the special order. B. Variable and incremental fixed costs associated with the special order. C. Variable and fixed manufacturing costs associated with the special order. D. Variable costs and incremental fixed costs associated with the special order, plus the contribution margin usually earned on regular units. . A target cost is computed as: A. Cost to manufacture plus a desired markup. B. Cost to manufacture plus designated selling expenses. C. Market willingness to pay less cost to manufacture. D. Market willingness to pay less desired profit.

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For the first question the answer is B Excess capacity implies that fixed costs are already covered by regular production so the minimum acceptable price for a special order should cover variable cost... View full answer

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