When evaluating a special order, management should:
A. Only accept the order if the incremental revenue exceeds all product costs.
B. Only accept the order if the incremental revenue exceeds fixed product costs.
C. Only accept the order if the incremental revenue exceeds total variable product costs.
D. Only accept the order if the incremental revenue exceeds full absorption product costs.
E. Only accept the order if the incremental revenue exceeds regular sales revenue.
Answer: C. Only accept the order if the incremental revenue exceeds total variable product costs.
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Managerial Accounting
- The difference between actual price per unit of input and the standard price per unit of input results in a:
- The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:
- When there is a difference between the actual volume of production and the standard volume of production, which of the following, based solely on fixed overhead, occurs:
- Standard costs are used in the calculation of:
- Operating budgets include all the following budgets except the:
- The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed, adding a new budget each period so that the budgets always cover the same number of future periods, is called:
- Which of the following must be prepared before the direct labor budget?
- All of the following are necessary for budgets to be effective except:
- Which of the following would be a line item for a variable costing income statement?
- Which of the following is not included in the product cost under variable costing?
- The sales level at which a company neither earns a profit nor incurs a loss is the:
- In cost-volume-profit analysis, the unit contribution margin is:
- A target income refers to:
- Which of the following statements is NOT true?
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