Question

To measure a special order's effect on operating income, decision makers must first calculate

A : profit margin.
B : operating costs.
C : avoidable costs.
D : unavoidable cost

Answer 1

To measure a special order's effect on operating income, decision makers must calculate avoidable costs.

Step-by-step explanation:

To measure a special order's effect on operating income, decision makers must first calculate avoidable costs. Avoidable costs are the costs that can be eliminated if a particular decision is made. By subtracting these costs from the operating income, decision makers can determine the impact of the special order on the overall profitability.