Smythe needs to consider the incremental costs of filling the special order. For example, will...

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Finance

Smythe needs to consider the incremental costs of filling the special order. For example, will the additional cost of materials required to fill the special order be less than the $20 special price? Since Smythes staff are paid fixed salaries, there should be no incremental fixed costs assuming they have time available to fill the order without working overtime. In addition, Smythe needs to consider the opportunity cost of filling this special order. Could he be generating more incremental revenue by filling a similar order at the regular price? If so, what is the likelihood a customer will place such an order before the end of the week?

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