When we are encountered with a special order decision, we need to consider only the relevant costs that will be added due to producing the extra units ( special order demanded)
Thus whichever option we choose I.e, whether to take the special order or not, the costs should be changing accordingly.
That is the reason we won't be including Fixed costs for decision making purpose, as it doesn't vary ( not change) with the change in level of production.
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R Vinay Kaarthik
Student
Chennai TN
India
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