Question

Accepting a special order will improve overall net operating income if the revenue from the special order exceeds: Multiple Choice the contribution margin on the order. the incremental costs associated with the order. the variable costs associated with the order. the sunk costs associated with the order.

Answer 1

Accepting a special order will improve overall net operating income if the revenue from the special order exceeds-the variable costs associated with the order

Explanation:

A special order refers to an extra or additional order of a item that is specifically requested by the customer.On the request or demand of the customer the  company can take a special order

The rule to accept the special order is that if the benefits from the order exceeds the cost incurred then  it is advisable to take extra order.

The capacity of the company to produce the special order is an important consideration in order to accept the special order

Thus we can say that

Accepting a special order will improve overall net operating income if the revenue from the special order exceeds-the variable costs associated with the order