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Arthur Cole Sunglasses sell for about $153 per pair. Suppose the company incurs the following average costs per pair: (click the icon to view the
Arthur Cole Sunglasses sell for about $153 per pair. Suppose the company incurs the following average costs per pair: (click the icon to view the cost information.) Arthur Cole has enough ldle capacity to accept a one-time-only special order from LA Glasses for 22,000 pairs of sunglasses at $69 per pair. Arthur Cole will not incur any varlable marketing expenses for the order. Read the requirements Requirement 1. How would accepting the order affect Arthur Cole's operating income? In adcition to the special order's effect on profits, what other (longer-term qualitative) factors should Arthur Cole's managers consider in deciding whether to accept the order? Prepare an incremental analysis to determine the special order's effect on operating income. (Enter a " for any zero balances. Use parentheses or a minus sign to indicate a ecrease in operating income from the special order.) Total Order Requirements Incremental Analysis of Special Sales Order Decision Per Unit (22,000 units) Revenue from special order Less varlable expense assoclated with the order: 1. How would accepting the order affect Arthur Cole's operating income? In addition to the spacial Varlable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order order's effect on profits, what other (longer-term qualitative) factors should Arthur Cole's managers consider in deciding whether to accept the order? the offer price of $69 is less than Arthur Cole's S79 cost to make the sunglasses. Revo asks you, as one of Arthur Cole's staff accountants, to explain whether his analysis is correct. Print Done Data Table 42 10 2 16 79 $2,000,000 total fixed manufacturing overhead / 125,000 pairs of sunglasses Print Done
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