Acceptance of additional work Flashcards
1
Q
What does it mean?
A
Deciding whether to accept orders at lower-than-usual selling prices.
2
Q
Conditions for acceptance 1
A
Selling price of the products is great than their marginal cost
3
Q
Conditions for acceptance 2
A
The business must have enough space capacity to be able to complete the work without having to turn down producing goods at normal price.
4
Q
Conditions for acceptance 3
A
The customer will not then sell the goods to other firms at a price below that charge by the original business.
5
Q
Why may it be difficult to maintain normal price for other customers?
A
Because they may become aware of the lower prices being offered to other customers.
