Answer (B) is correct . Because depreciation will be expensed whether or not the company accepts the special order, it is irrelevant to the decision. Only the variable costs are relevant.
Answer (A) is incorrect because Materials are relevant to a decision whether to take a special order.
Answer (C) is incorrect because Direct labor is relevant to a decision whether to take a special order.
Answer (D) is incorrect because Variable overhead is relevant to a decision whether to take a special order.
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