A special order generally should be accepted if:

A) its revenue exceeds allocated fixed costs, regardless of the variable costs associated with the order.
B) excess capacity exists and the revenue exceeds all variable costs associated with the order.
C) excess capacity exists and the revenue exceeds allocated fixed costs.
D) the revenue exceeds variable costs, regardless of available capacity.

Special Order

An order for goods or services that is outside the company's normal scope of operations or requires customization to meet the customer's specific requirements.

Excess Capacity

A situation where a company can produce more goods or services than currently demanded by the market, indicating underutilization of resources.

Allocated Fixed Costs

Fixed costs that are assigned or distributed across different departments, products, or activities within a company for budgeting and accounting purposes.