Special Order Decision Calculator
Evaluate an additional order using incremental revenue, avoidable costs and any displaced contribution.
Incremental profitExample$2,500
- Minimum incremental unit price
- $13.00
How to calculate special order decision
Incremental profit = quantity × (offered price − incremental unit cost) − setup − displaced contribution
Include only costs changed by accepting the order. Check capacity, channel conflicts and customer expectations separately.
Worked example
An illustrative scenario. “Reset to example” restores it in the calculator.
- Order quantity
- 500 units
- Offered unit price
- $18
- Incremental unit cost
- $12
- Extra setup costs
- $500
- Contribution displaced by this order
- $0
Incremental profit: $2,500
Special Order Decision FAQ
Should I include allocated fixed overhead?
Include overhead only when accepting the order changes that cost. Existing unavoidable allocations do not change the incremental decision.