1. How would accepting the order affect Hoover Stenback's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Hoover Stenback's managers consider in deciding whether to accept the order? 2. Hoover Stenback's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $66 is less than Hoover Stenback's $81 cost to make the sunglasses. Revo asks you, as one of Hoover Stenback's staff accountants, to explain whether his analysis is correct. Hoover Senback Sunglasses sell for about 512 per par. Suppose the company inours the following average costs per par (Click the icon to view the cost information) Hoover Stenback has enough ide capacity to accept a one-time-only special order from Washington Glasses for 16.000 pairs of sunglasses at Se per pale. Hoover Sterback will not irour any variable marketing expenses for the order Read the requirements Requirement 1. How would accepting the order affect Hoover Sinback's operating income? In addition to the special order's elect on prots, what other forgetorm qualitative) factors should Hoover Stenbado managers considerin decidir whether to accept the order? Prepare an incremental analysis to determine the speciel order's effect on operating income (Entra for any ders belancesUne parentheses or a minus sign to indicato a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (16,000 unit) Data Table Rover from special order Less var ble expense associated with the order Variatie manuacturing costs Director 30 Director 11 Cont/bution margin Variable marfacturing owerhead Loss Additional fedexpenses associated with the order Variable mag expenses 2 Increase (decrease in operating income from the special order 20. Ford manufacturing overhead 81 Total $2,300,000 od manufacturn overhead/115,000 pairs of sunglasses 9 Print Done mathxl.com HomeMyPCC Chapter 08 Graded Homework - BA-213-0- BA-213-0-26540 - Managerial Accounting Homework: Chapter 08 Graded Homework Score: 0 of 6 pts 1 of 5 (1 comple E8-22A (similar to) Hoover Stenback Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per pair (Click the icon to view the cost information.) Hoover Stenback has enough idle capacity to accept a one-time-only special order from Washington Glasses for 16,000 pairs of Read the requirements Requirement 1. How would accepting the order affect Hoover Stenback's operating incomo? In addition to the special order's ef whether to accept the order? Prepare an incremental analysis to determine the special order's effect on operating income(Enter a "O" for any zero balances Total Order Incremental Analysis of Special Sales Order Decision Per Unit (16,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Enter any number in the edit fields and then click Check Answer. 2 parts remaining Clear All ge costs per pair es for 16,000 pairs of sunglasses at $66 per pair. Hoover Stenback will not incur any variable marketing expenses for the order. the special order's effect on profits, what other (longer-term qualitative) factors should Hoover Stenback's managers consider in deciding or any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) $ 39 Direct materials --- 11 Direct labor . . . . 9 Variable manufacturing overhead Variable marketing expenses 2. 20 Fixed manufacturing overhead $ 81 Total cost * $2,300,000 total fixed manufacturing overhead / 115,000 pairs of sunglasses
