Rapid Growth Pty Ltd is presently operating at full capacity. They received a special order that, if accepted, would require refusing some sales to regular customers. Which of the following factors should management consider when making their decision?

Question

Quizplus · Accepted Answer

Management should consider the opportunity cost of accepting the special order and refusing sales to regular customers. In this case, the special order may be more profitable, but it could damage the company's long-term relationship with its regular customers. Therefore, management should carefully evaluate the potential impact on regular customers before accepting the special order. Option A is irrelevant to this question as it talks about vertical integration. Option B is not relevant to this question as it relates to economies of scale. Option D is incorrect as it contradicts the question statement because company has already reached its full capacity.

Rapid Growth Pty Ltd Is Presently Operating at Full Capacity