Accounting Assignment Help With Exploring Additional Markets

1.4 Accepting Special Order and Exploring Additional Markets

In case of spare capacity, a firm can increase its total profits by accepting an special order above the marginal cost and at a price lower than its regular selling price. The additional contribution earned from the special order will be the additional profit to the firm. When additional order is accepted at a price below prevailing price to utilise idle capacity, it should be carefully seen that it will not affect the normal market and goodwill of the company. The special order from a local dealer should not be accepted as it will affect the relationship with other deale$

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