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ABC Ltd is deciding whether or not to accept a special order for 500 units. It has no spare capacity to accept the order. If
ABC Ltd is deciding whether or not to accept a special order for 500 units. It has no spare capacity to accept the order. If the order is accepted, the incremental revenue would be $10,000 and the incremental cost to make the order would be $8000. In deciding whether or not to accept the order, the firm should consider:
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the incremental revenue = $10,000 and the incremental cost = $8000, only.
the opportunity cost of accepting the order as part of the impact on profits.
the unavoidable costs.
all manufacturing costs only.
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