McKnight Sunglasses sell for about $185 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) McKnight has enough idle capacity to accept a one-time-only special order from Vision Lenses for 18,000 pairs of sunglasses at $83 per pair. McKnight will not incur any variable marketing expenses for the order. Requirements Requirement 1. How would accepting the order affect McKnight's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should McKnight's managers consider in deciding whether to accept the order? Prepare the analysis to determine the effect on operating income. (Enter a zero, "0", in an input box if there is no expected change in the expense. Use parentheses or a minus sign for an expected decrease in operating income.) McKnight Incremental Analysis 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 In addition to the special order's effect on profits, what other (longer-term qualitative) factors should McKnight's managers consider in deciding whether to accept the order? (Select all that apply.) A. Will lowering the sale price tarnish McKnight's image as a high-quality brand? B. Will McKnight's other customers find out about the lower sale price McKnight offered to Vision Lenses? If so, will these other customers demand lower sale prices? C. When should the equipment used to produce sunglasses be refurbished and at what cost? D. How will McKnight's competitors react? Will they retaliate by cutting their prices and starting a price war? Data table Direct materials $ 50 10 Direct labour Variable manufacturing overhead Variable marketing expenses 8 4 20 * Fixed manufacturing overhead Total cost $ 92 * $2,800,000 total fixed manufacturing overhead / 140,000 pairs of sunglasses -