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Hampshire Sunglasses sell for about $154 per pair. Suppose that the company incurs the following average costs per pair (Click the icon to view
Hampshire Sunglasses sell for about $154 per pair. Suppose that the company incurs the following average costs per pair (Click the icon to view the cost information.) Hampshire has enough idle capacity to accept a one-time-only special order from Colorado Shades for 18,000 pairs of sunglasses at $79 per pair. Hampshire will not incur any variable selling expenses for the Read the requirements order. Requirement 1. How would accepting the order affect Hampshire's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Hampshire'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 Expected increase in expenses Expected sunglasses sunglasses in operating income In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Hampshire's managers consider in deciding whether to accept the order? OA Will Hampshire's other customers find out about the lower sale price Hampshire offered to Colorado Shades? If so, will these other customers demand lower sale prices? OB. Will lowering the sale price tamish Hampshire's image as a high-quality brand? OC. How will Hampshire's competitors react? Will they retaliate by cutting their prices and starting a price war? D. All of the above i OE. None of the above
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