Jasper Smith Sunglasses sell for about $145 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Jasper Smith has enough idle capacity to accept a one-time-only special order from Montana Glasses for 22,000 pairs of sunglasses at $76 per pair. Jasper Smith will not incur any variable marketing expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Jasper Smith's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Jasper Smith'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 Incremental Analysis of Special Sales Order Decision Per Unit (22,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Requirements 1. How would accepting the order affect Jasper Smith's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Jasper Smith's managers consider in deciding whether to accept the order? 2. Jasper Smith's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $76 is less than Jasper Smith's $88 cost to make the sunglasses. Revo asks you, as one of Jasper Smith's staff accountants, to explain whether his analysis is correct. Data table Direct materials. 41 Direct labor... 11 Variable manufacturing overhead 8 Variable marketing expenses.. 3 25* Fixed manufacturing overhead $ 88 Total cost... * $2,300,000 total fixed manufacturing overhead + 92,000 pairs of sunglasses Print Done - Clear all Check answer