#27 When deciding to accept or reject a special order, which of the following co
ID: 2590072 • Letter: #
Question
#27 When deciding to accept or reject a special order, which of the following costs is most likely to be irrelevant? A. The wages of direct labor to make the order B. Depreciation on the machinery used to make the order C. The direct raw material used to make the order D. The sales commission paid as a percent of the order price.
#21 Which of the following is generally unfavorable for ratio changes? A. An increase in inventory turnover B. A decrease in operating expenses C. A decrease in the asset turnover D. An increase in the price-earnings ratioExplanation / Answer
27All Variable Costs are relavant costs. They will change with th decision to accept or reject the Special Order. Therefore Wages of Direct Labor, Direct Raw materials and Sales commission as a percentage of sale Price is relavant Costs. Irrelavant costs are those costs that cannot be changed with the alternative courses of action. Apportioned Fixed Costs are irrelavant. Depreciation is a apportioned historical cost. It cannot be changed with the decision to accept or reject the special order. Therefore it is irrelavant.
Answer B
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