When making a short-term special decision,a company should:

Question

Quizplus · Accepted Answer

Separating variable costs from fixed costs is essential in making short-term special decisions because a company needs to know how much of its costs are directly tied to production and how much is fixed and unrelated to output. This information is necessary in determining the break-even point and making the most profitable decision. Focusing on qualitative or quantitative factors only or using a traditional direct costing approach may not provide the necessary insight into the variable and fixed costs involved.

When Making a Short-Term Special Decision,a Company Should