When a company does not have sufficient capacity to fill an order for less than the current selling price, what additional factor must be taken into consideration?
A)The decision process is the same whether there is sufficient capacity or not.
B)How will the lack of capacity affect the quality of the product?
C)Can resources be transferred from producing product to sell at the current price to producing product at the special price?
D)opportunity costs

Question

Quizplus · Accepted Answer

When a company does not have sufficient capacity to fill an order for less than the current selling price, the additional factor that must be taken into consideration is the opportunity cost. Opportunity cost refers to the benefits that could be obtained by choosing one alternative over the other. In this case, the company must weigh the benefits of accepting the lower-priced order against the benefits of not accepting it and using its limited resources to produce products at the current selling price.

When a Company Does Not Have Sufficient Capacity to Fill