Which of the following costs is relevant to a special-order decision?

Question

Quizplus · Accepted Answer

Direct labour costs to manufacture the special-order units are relevant costs because they directly relate to the production of the special order. The other options are not relevant because fixed manufacturing overhead and the lease cost allocation are indirect costs that will be incurred whether or not the special order is accepted. Direct materials used for regular production are also not relevant to the special-order decision because they are not specifically related to the production of the special order.

Which of the Following Costs Is Relevant to a Special-Order