Question

Managers should accept special orders provided the special order price exceeds the product cost per unit under absorption costing.

True or False

Answer 1

ANSWER:

Managers should accept special orders provided the special order price exceeds the product cost per unit under absorption costing:

Then Tha above statement is False because

• Special request are customary on the beginning of company loss under uneven costing. The stretch second-hand is appropriate fee which bring in add up to asking price of making under uneven price and any other certain extra rate directly to order.
• Absorption price price tag apiece component is other than up-and-down estimate asking price apiece detachment as incorporation estimate besides includes set manufacturing overhead in effect cost.
• In deciding whether to agree to a elite contract or not we individual take into account incremental expense of produce that is inconsistent or any other expenditure that would be desired to perfect the tidy (such as particular logo asked by buyer). hard and fast expense is not measured as flat expense act not amend whether we give a positive response edict or not.
• Another device to deem in a elite edict is that the friendship has ample position to carry out order. If the business has not a sufficient amount capability in that case compliant proposal may product in loosing even sales.
• In this container the the singular peacefulness penalty have got to be even to consistent sales price.

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