contribution costing as a means to help make special order decisions

1. Contribution costing is a method used to determine the profitability of a product or service.
2. It helps businesses make informed decisions about whether to accept or reject special orders.
3. Special orders are orders that are outside of a company's normal business operations.
4. Contribution costing takes into account the variable costs associated with producing a product or service.
5. It also considers the fixed costs that are not affected by changes in production levels.
6. By using contribution costing, businesses can determine the minimum price they need to charge for a special order to break even.
7. This information can help businesses avoid accepting orders that are not profitable.
8. Contribution costing can also be used to determine the most profitable product mix for a business.
9. By analyzing the contribution margin of each product, businesses can determine which products are most profitable to produce.
10. Overall, contribution costing is a valuable tool for businesses looking to make informed decisions about special orders and product mix.