Asked by Matthew Valenzuela on Jun 09, 2024
Verified
In a special order situation, any fixed cost associated with the order would be irrelevant.
Fixed Cost
A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity.
Special Order
A one-time customer order, often at a negotiated price, that is outside the company's standard range of products or services.
Irrelevant
Pertains to information or factors that do not influence or impact a decision-making process.
- Understand the importance of capacity utilization and its influence on decision-making in particular order scenarios.
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Learning Objectives
- Understand the importance of capacity utilization and its influence on decision-making in particular order scenarios.
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