2. Assuming XYZ company's objective is to maximize profit, if the customer wants a special order of 10,000 units, should XYZ company accept or reject special order EXPLANATION & SOLUTION Notes to the question A. When tackling a question on special order it is very important to consider: does the company has the capacity to accept the order or there will be opportunity cost involved B. Reasoning must be based on the format: Sales (VC) CM (FC) OP Revenue Variable cost Contribution Margin (Fixed Cost) Operating Profit Decision will be based on incremental variation or increase of CM. If the CM increases, it means the order can bring more profit by accepting the order Page 1 / 1 - Q +