Rosemont Tennis is planning for the coming year. Investors would like to earn a 12% return on the company's $25 million of assets. The company primarily incurs fixed costs to maintain the tennis courts. Fixed costs are projected to be $12,500,000 for the year. About 500,000 court time hours are expected to be played each year. Variable costs are about $5 per hour of court time.

A manager should always reject a special order if
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1 point
the special order price is less than the regular sales price.
there is available excess capacity.
the special order price is less than the variable costs of the order.
the special order will require variable nonmanufacturing expenses.
When deciding whether to accept a special order, which of the following is irrelevant?
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1 point
Fixed costs that will not be affected by the order
Available excess capacity
The variable costs associated with the special order
The effect of the order on regular sales