When making a decision to accept a special order, management must consider
A)the impact that additional manufacturing time will have on unit costs of its current products.
B)whether the purchaser will accept additional high costs of a special order.
C)whether a lower price will convince the purchaser to become a regular customer.
D)whether capacity exists to meet the demand of the order.

Question

Quizplus · Accepted Answer

Management must first ensure that there is enough capacity to meet the demand of the special order before considering any other factors. If additional manufacturing time is required, it may impact the unit costs of current products, but this is secondary to ensuring capacity exists. Likewise, whether the purchaser accepts additional high costs or a lower price is important, but only if capacity is available to meet the demand.

When Making a Decision to Accept a Special Order, Management