Special orders increase income if the revenue from the order exceeds the incremental variable and fixed costs incurred to fill the order.

Question

Quizplus · Accepted Answer

Special orders are profitable only if the revenue generated from the order is greater than the incremental variable and fixed costs associated with the order. If the revenue generated is less than the costs, then the special order would result in a loss for the company.

Special Orders Increase Income If the Revenue from the Order