Which of the following costs are irrelevant for a special order that will allow an organization to utilize some of its present idle capacity?
A)Direct materials
B)Indirect materials
C)Variable overhead
D)Unavoidable fixed overhead
E)Differential sales commission

Question

Quizplus · Accepted Answer

Unavoidable fixed overhead costs are still incurred even if the organization accepts the special order. Therefore, they are not relevant to the decision-making process because they would not change whether or not the organization accepts the order. The other costs listed are relevant and should be considered in the decision.

Which of the Following Costs Are Irrelevant for a Special