Lucca Ladies Shoes, an exclusive Italian shoe manufacturer, sells their handcrafted womens fashion originals for about $300 per pair. Suppose the company incurs the following average costs per pair of shoes:

Direct Materials $80

Direct Labor 28

Variable Manufacturing Overhead 22

Variable Marketing Expenses 4

Fixed Manufacturing Overhead 32*

Total Costs (per pair) $166

* $4,000,000 Total Fixed Mfg. O/H

125,000 Pairs of Shoes

Lucca has enough idle capacity to accept a one-time only custom special order from a specialty department store in Miami and the South Florida area for 20,000 pairs of a special design ladies summer shoe at $142 per pair. Lucca will not incur any additional variable marketing expenses for the special order.

a. How would this special order affect Luccas operating income?

b. In addition to the special orders effect on current profits, what other longer-term qualitative factors should Luccas management consider before any decision to accept the special order opportunity?