Accepting a special order will improve overall net operating income if the revenue from the special order exceeds-the variable costs associated with the order
Explanation:
A special order refers to an extra or additional order of a item that is specifically requested by the customer.On the request or demand of the customer the company can take a special order
The rule to accept the special order is that if the benefits from the order exceeds the cost incurred then it is advisable to take extra order.
The capacity of the company to produce the special order is an important consideration in order to accept the special order
Thus we can say that
Accepting a special order will improve overall net operating income if the revenue from the special order exceeds-the variable costs associated with the order