If a company anticipates that other sales will be affected by the acceptance of a special order then
A) lost sales should be considered in the incremental analysis.
B) lost sales should not be considered in the incremental analysis.
C) the order should not be accepted.
D) the order will only be accepted if the plant is below capacity.

Question

Quizplus · Accepted Answer

If other sales are going to be affected, then lost sales should be considered in the incremental analysis to determine if the special order will be profitable overall. Ignoring the impact on other sales could result in an inaccurate analysis and a decision that ultimately hurts the company's bottom line.

If a Company Anticipates That Other Sales Will Be Affected