Formidable A Company Should Accept A Special Order If

183 Gregg Company supplies schools with floor mattresses to use in physical education.

A company should accept a special order if. The JCP jewelry case would be marketed under JCPs own label. Under certain conditions special order less than full costs may in fact increase a firms overall profitability. Both manufacturing and service companies often receive requests to fill special orders.

You must offer a full refund if an item is faulty not as described or does not do what its supposed to. When deciding whether to accept a special order management must consider several factors. The incremental profit is Rs75000 calculated as follows.

B The incremental analysis shows Carney Company should accept the special order because incremental revenues exceed incremental costs. Incremental revenues 500 Rs400 Rs200000 Incremental costs. Special-order decisions involve situations in which management must decide whether to accept unusual customer orders.

Order for 2000 windows at 225 per window. Anchor has received special order inquires from two companies. Should the company accept the special order.

Variable manufacturing 500 Rs250 125000 Incremental profit Rs. A company is operating at capacity and receives a special order. The new revenue exceeds new variable costs The new revenue exceeds new fixed costs The new revenue exceeds all new variable and any additional fixed costs Accept the order regardless of costs Not accept the order for any reason Question 24 067 pts 24.

Accepting the special order would not affect the companys regular business or its fixed costs. The rule is to accept the order if benefits exceed costs. The business should accept the special orders if the sale price covers the variable costs and if there is an alternative use for spare capacity then this could result in a higher overall contribution.