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Accept or Reject Special Order | Managerial Accounting
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When deciding whether to accept or reject a special order, you should:
1. only consider relevant costs (ignore any costs that won't change whether or not you accept the order)
2. accept the order if the incremental revenue exceeds the incremental cost of accepting the order
If you don't have idle capacity, then the forgone profit of any actions you are giving up (by accepting the special order) should be included as a cost of accepting the special order.—
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1. only consider relevant costs (ignore any costs that won't change whether or not you accept the order)
2. accept the order if the incremental revenue exceeds the incremental cost of accepting the order
If you don't have idle capacity, then the forgone profit of any actions you are giving up (by accepting the special order) should be included as a cost of accepting the special order.—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
—
SUPPORT EDSPIRA ON PATREON
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
—
LISTEN TO THE SCHEME PODCAST
—
GET TAX TIPS ON TIKTOK
—
ACCESS INDEX OF VIDEOS
—
CONNECT WITH EDSPIRA
—
CONNECT WITH MICHAEL
—
ABOUT EDSPIRA AND ITS CREATOR
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