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Jasper Juda Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per pair E(Click the icon to view the
Jasper Juda Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per pair E(Click the icon to view the cost information.) Jasper Juda has enough idle capacity to accept a one-time-only special order from Colorado Glasses for 22,000 pairs of sunglasses at $82 per pair. Jasper Juda will not incur any variable marketing expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Jasper Juda's operating income? In addition to the special order's effect on profits, what other (longer-term, qualitative) factors should Jasper Juda's managers consider deciding whether to accept the order? Prepare the analysis to determine the effect on operating income. (Enter a zero in an input box if there is not an expected change in the expense. Use parentheses or a minus sign for an expected decrease in operating income.) Jasper Juda Incremental Analys is of Special Sales Order Expected increase in revenues Expected increase in expenses: Variable manufacturing cost Fixed manufacturing costs Total expected increase in expenses Expected increase (decrease) in operating income X Data Table Direct materials 60 12 Direct labor Variable manufacturing overhead. 6 Variable marketing expenses 4 25 Fixed manufacturing overhead 107 $ Total cost $2,200,000 total fixed manufacturing overhead 88,000 pairs of sunglassses
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