Accepting a special order will improve overall net operating income if the revenue from the special order exceeds:
A. the sunk costs associated with the order.
B. the contribution margin on the order.
C. the variable costs associated with the order.
D. the incremental costs associated with the order.
Answer: D
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?Modiste, Inc. manufactures two kinds of bagslong dash—totes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated overhead costs for the year are $ 24 comma 500$24,500. Additional estimated information is given below.
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