Chapter 9

11. Special order decisions are about whether to accept or reject special orders at prices below the normal market prices.

a. True

b. False

12. Sales commission expenses are included in special order decision analysis even if the customer approached the company directly.

a. True

b. False

13. Examples of relevant fixed costs for a special order decision are the purchase of additional machinery, an increase in supervisory help, and an increase in insurance premiums required by a specific order.

a. True

b. False

14. Segment profitability analysis includes the preparation of a segmented income statement.

a. True

b. False

15. Avoidable costs are the direct variable costs and direct fixed costs traceable to the segments.

a. True

b. False