Question

If a company must expand capacity to accept a special order, it is likely that there will be:____.

Answer 1

If a company must expand capacity to accept a special order, it is likely that there will be a increase in fixed cost

A cost that remains constant regardless of how many units of products or services are produced or sold is referred to as a fixed costs. Fixed costs are outlays that a business must cover regardless of the particular commercial activities it engages in. As a result, fixed expenses are typically indirect because they don't relate to the creation of any goods or services by a corporation. Companies often have two sorts of costs: fixed costs and variable costs, which add up to their overall costs. Shutdown points are frequently used to cut fixed costs.

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