If a special order results in a positive contribution margin of $8 when the contribution margin for regular orders is $15,which of the following decisions is the most likely to be chosen?
A)Accept the order
B)Reject the order
C)Accept the order,but only if the customer agrees to an increase in the selling price to match the $15 regular contribution margin.
D)Accept the order,but only if the customer agrees to an increase of $7 in the selling price

Question

Quizplus · Accepted Answer

A positive contribution margin indicates that the special order will cover its variable costs and contribute to fixed costs and profit, making it beneficial to accept.

If a Special Order Results in a Positive Contribution Margin