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IF YOU CANT SEE PLEASE ZOOM IN USING CTRL AND PLUS SIGN Opal Juda Sunglasses sell for about $152 per pair. Suppose the company incurs
IF YOU CANT SEE PLEASE ZOOM IN USING CTRL AND PLUS SIGN
Opal Juda Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per pair B!! (Click the icon to view the cost information.) Opal Juda has enough idle capacity to accept a one-time-only special order from Rolling Glasses for 20.000 pairs of sunglasses at $87 per pair. Opal Juda will not incur any variable marketing expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Opal Juda's operating income? In addition to the special order's effect on profits, what other longer-term qualitative) factors should Opal Juda'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 "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order (20,000 units) Incremental Analysis of Special Sales Order Decision Per Unit i Data Table Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Direct materials Contribution margin Less: Additional fixed expenses associated with the order Direct labor Variable manufacturing overhead ........ Increase (decrease) in operating income from the special order Variable marketing expenses............... Fixed manufacturing overhead .............. A Requirements - X Total cost...... * $2.200.000 total fixed manufacturing overhead / 88,000 pairs of sunglasses Print Done 1. How would accepting the order affect Opal Juda's operating income? In addition to the special order's effect on profits, what other longer-term qualitative) factors should Opal Juda's managers consider in deciding whether to accept the order? 2. Opal Juda's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $87 is less than Opal Juda's $97 cost to make the sunglasses. Revo asks you, as one of Opal Juda's staff accountants, to explain whether his analysis is correct. Print Done Clear All Check Answer Check Answer - TelltIStep by Step Solution
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