Hampshire Sunglasses sell for about $158 per pair. Suppose that the company incurs the following average costs per pair:

Hampshire has enough idle capacity to accept a one-time-only special order from Montana Shades for 22,000 pairs of sunglasses at $73 per pair. Hampshire will not incur any variable selling expenses for the order.

Hampshire Sunglasses sell for about $158 per pair. Suppose that the company incurs the folowing average costs per pair: (Click the icon to view the cost information.) Hampshire has enough idio capacty to nccept a one-time-ony special arder from Montana Shades for 22,000 pais of sunglasses at $73 per paic. Hampshire will not incur any variablo soling expenses for the order. Read the roquicements. Data table Requirements 1. How would accepting the order aflect Hampshire's cperating inoome? In adbsion to the special ordor's effect on profis, what ether (fonger-term qualinative) factors should Hampahice's managers consider in deciding whether to accept the erder? 2. Harrpshire's markesing manager, Peler Juda, argues aganat accepting the special order becaube the ofter price of $73 is less Van Hampshire's $70 cost to make the sunglasses, Juda asks you, as one of Harypuhe's slaff accountants, to explain whether his anabsis is correct. What would you say? Requirement 1. How would accepting the order affect Hampshire's operating income? In addition to the special order's effect on profits, what other (fonger-term qualitative) factors should Hampshire's managers consider in deciding whether to accept the order? Prepare the anglysis 10 delermine the effect on operating income. (Enter decreases to profls with a parentheses or minus sign.) Expected increase in revenues sunglasses * Expected increaso in expenses sunglasses * Expoctod in operating income In addison to the special order's effect on profts, what other (longer-term quastative) tactors should Hampshire's managers considet in deciding whether to accept the order? A. Wal Hampshire's other customers find eut about the lower sale price Hampahire oflered to Montana Shades? If so, will these other customers demand lower sale prices? B. How wall Hampshire's compettors react? Wil they retalase by cutting their phices and startidg a prico wan? c. Wallowering the sale price tamieh Hampshire's image as a high-quality brand? D. All of the above E. None of the above Requirement 2. Hampthire's maketing manager, Peler Juda, argues against accepting the special order because the offer price of $73 is less than Hampshire's $70 cost to makn the sungiasses. Juda asks you, as one of Hampshire's staff accountants, 10 esplain wheber his anslyis is conect. What would you say? When deciding whether to accept a spedial ordec, we should compace the not we fil the order are to cur decision. This is why comparing the $73 price Montana Shades offered us with our $79 fotal cost of making the sunglasses is The additional revenues and the oddsonal conts that wo wall incur to fa the special order are If we accept the Montana shades special order, wo wall incur only of additional cost per par, which is than the $73 per pair that Montana Shades offered. Therefore, we should the special order to the company's arenoatinn inmme