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(Click the icon to view the cost information.) Newtown has enough idle capacity to accept a one-time-only special order from Water Shades for 17.000 pairs
(Click the icon to view the cost information.) Newtown has enough idle capacity to accept a one-time-only special order from Water Shades for 17.000 pairs of sunglasses at $80 per pair. Newtown will not incur any variable selling expenses for the order Read the requirements. Requirement 1. How would accepting the order affect Newtown's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Newtown's managers consider in deciding whether to accept the order? Prepare the analysis to determine the effect on operating income. (Enter decreases to profits with a parentheses or minus sign.) Expected increase in revenues sunglasses sunglasses Expected increase in expenses Expected in operating income Requirements Data Table Direct materials s 39 15 1. How would accepting the order affect Newtown's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Nowtown's managers consider in deciding whether to accept the order? 2. Newtown's marketing manager, Peter Kyler, argues against accepting the special order because the offer price of $BO is less than Newtown's $83 cost to make the sunglasses. Kyler asks you, as one of Newtown's staff accountants, to explain whether his analysis is correct. What would you say? Direct labor Variable manufacturing overhead Variable selling expenses 6 3 $20 83 Fixed manufacturing overhead S Total cost * $2,050,000 Total fixed manufacturing overhead/102,500 Pairs of sunglasses Print Done Print Done Choose from any list of enter any number in the input fields and then click Check
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