In the analysis concerning the acceptance or rejection of a special order, which items are relevant?

CHAPTER 7

INCREMENTAL ANALYSIS

SUMMARY OF QUESTION TYPES BY STUDY OBJECTIVES AND

LEVEL OF DIFFICULTY

ItemSOLODItemSOLODItemSOLODItemSOLODItem SOLOD

True-False Statements

1.1E8.1E15.3E22.5E29.6E

2.1E9.1E16.3E23.5E30.7 E

3.1E10.1,3E17.3E24.5E31.7E

4.1E11.2E18.3E25.5E32.7E

5.1E 12.2E19.4E26.6E

6.1E13.2E20.4E27.6E

7.1E14.2E21.4E28.6E

Multiple Choice Questions

33.1E50.1E67.2E84.3E101.5E

34.1E51.1,3E68.3M85.3M102.5E

35.1E52. 1,3E69.3M86.4M103.5E

36.1E53.2M70.3M87.4M104.5E

37.1E54.2M71.3 M88.4M105.5E

38.1E55.2M72.3M89.4M106.6M

39.1E56.2E73.3E90.4E 107.6M

40.1E57.2E74.3M91.4M108.6M

41.1E58.2E75.3M92.4E109.6M

42.1 E59.2E76.3M93.4M110.6M

43.1E60.2M77.3M94.4M111.6E

44.1E61. 2M78.3E95.4M112.6E

45.1E62.2M79.3E96.4E113.7E

46.1E63.2E80. 3E97.4E114.7M

47.1E64.2E81.3M98.4E115.7E

48.1E65.2E82.3E99. 5E116.7M

49.1E66.2E83.3M100.5E117.7E

Note:E = EasyM = MediumH = Hard

Which of the following is not one of the factors company considers when accepting a special order?

Answer and Explanation: The answer is D. Sunk costs. Factors that should be considered when accepting a special order are all relevant costs, the excess capacity, and other qualitative aspects that need to be accounted for.

Which of the following is not considered in the incremental analysis?

b) Sunk costs are never considered in incremental analysis. Sunk costs are those that are irreversible and cannot be changed regardless of what course of action is taken.

Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity?

Answer and Explanation: If a company can accept a special order without affecting its regular sales and is within plant capacity net income will increase if the special sales price per unit exceeds the unit variable costs.

In the analysis concerning the acceptance or rejection of a special order, which items are relevant?

Which of the following is not one of the factors company considers when accepting a special order?

Which of the following is not considered in the incremental analysis?

Which of the following is true if a company can accept a special order without affecting its regular sales and is within plant capacity?

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