Fixed costs are relevant to a special pricing decision if they are subject to change as a result of the special order.

Question

Quizplus · Accepted Answer

Fixed costs that remain constant regardless of the level of production are not relevant to a special pricing decision, as they are not affected by the specific order. However, if fixed costs can be avoided or reduced by accepting a special order, they are considered relevant and should be factored into the pricing decision.

Fixed Costs Are Relevant to a Special Pricing Decision If