Outdoor Living Company has just received a special order for 500 hammocks. Outdoor Living has sufficient idle capacity to accept the order. Accepting the order will increase Outdoor Living's variable manufacturing costs. Which type of cost is considered a sunk cost to Outdoor Living's decision of whether to accept or reject the special order?
A. Labor cost to make the 500 hammocks
B. Depreciation on equipment that would be used to make the hammocks
C. Materials handling cost
D. Raw materials to make the 500 hammocks
Answer: B
You might also like to view...
The merchandise budget plan
A. uses a weighted-average score for each vendor. B. identifies the performance of individual SKUs in the assortment plan. C. compares actual and planned sales to determine whether more merchandise is needed. D. is used to keep track of the actual merchandise flows. E. specifies the level of inventory needed to support the sales.
Outline the steps involved in business unit strategic-planning process
What will be an ideal response?
What does it mean to demonstrate professional skepticism?
What will be an ideal response?
The lack of conflict in a team can be a sign of a problem because:
a. Conflict encourages strong leadership. b. Members may be agreeing with each other just to avoid conflict. c. Conflict increases “defensive avoidance.” d. Conflict enhances a team’s communication network.