Gibbs Corporation makes indoor gas fireplaces.A standard fireplace includes unit-level materials,labor,and overhead costs.In addition,the company incurs product-level engineering and advertising costs.The sales staff is paid a 5% commission on each fireplace sold.A sales representative has been in contact with a building developer who wants to buy 20 fireplaces only if he can buy them at amount lower than Gibbs' selling price.Which of the following costs would be relevant to this special order decision?

Question

Quizplus · Accepted Answer

The relevant costs in a special order decision are the unit-level and batch-level costs that will be incurred if the special order is accepted.

Gibbs Corporation Makes Indoor Gas Fireplaces