Which of the following costs is most likely relevant in deciding whether to accept a special order?
A)Direct material, variable overhead, and fixed overhead
B)Variable overhead, fixed overhead, and direct labor
C)Direct material, direct labor, and variable overhead
D)Direct material and direct labor

Question

Quizplus · Accepted Answer

When deciding whether to accept a special order, only the costs that will be directly affected by the order are relevant. The direct material, direct labor, and variable overhead costs will be directly affected, making choice C the best option. Fixed overhead is not relevant in the short-term decision-making process, as it will not be impacted by the special order.

Which of the Following Costs Is Most Likely Relevant in Deciding