Melrose Sunglasses sell for about $156 per pair. Suppose that the company incurs the following average costs per pair: (Click the icon to view the cost information.) Read the Requirement 1. How would accepting the order affect Melrose's operating income? In addition to Prepare the analysis to determine the effect on operating income. (Enter decreases to profits with Expected increase in revenues Expected increase in expenses Expected sunglasses x sunglasses x in operating income In addition to the special order's effect on profits, what other (longer-term qualitative) factors should A. How will Melrose's competitors react? Will they retaliate by cutting their prices and starting B. Will lowering the sale price tarnish Melrose's image as a high-quality brand? C. Will Melrose's other customers find out about the lower sale price Melrose offered to Water D. All of the above E. None of the above Requirements 1. How would accepting the order affect Melrose's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Melrose's managers consider in deciding whether to accept the order? 2. Melrose's marketing manager, Peter Root, argues against accepting the special order because the offer price of $76 is less than Melrose's $84 cost to make the sunglasses. Root asks you, as one of Melrose's staff accountants, to explain whether his analysis is correct. What would you say? correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are If we accept the Water Shades special order, we will incur only of additional cost per pair, which is than the $76 per pair that Water Shades offered. Therefore, we should the special order to the company's operating income. correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special ori the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should operating income. of additional the special or If we accept than the $76 the company's correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are If we accept the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should of additional cost per pair, which is than the $76 the special order to the company's operating income. When deciding whether to accept a special order, we should compare the $76 price Water Shades offered us with our $84 total cost of making the su The additional revenues and the additional costs that we will incur to fill the the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should operating income. Costs that we will incur whether or not we fill the order are revenues we will receive against the differential costs prior to filling the order. revenues we will receive against the differential costs we will incur to fill the order. revenues prior to filling the order against the extra costs we will incur to fill the order. to our decision. This is why comparing the Melrose Sunglasses sell for about $156 per pair. Suppose that the company incurs the following average costs per pair: (Click the icon to view the cost information.) Read the Prepare the analysis to determine the effect on operating income. (Enter decreases to profits with a parentheses or minus sign.) Expected increase in revenues sunglasses x Expected increase in expenses sunglasses Expected in operating income In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Melrose's managers consider in deciding whether to accept the order? A. How will Melrose's competitors react? Will they retaliate by cutting their prices and starting a price war? B. Will lowering the sale price tarnish Melrose's image as a high-quality brand? C. Will Melrose's other customers find out about the lower sale price Melrose offered to Water Shades? If so, will these other customers demand lower sale prices? D. All of the above E. None of the above correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should of additional cost per pair, which is If we accept the special order to the company's operating income. Melrose Sunglasses sell for about $156 per pair. Suppose that the company incurs the following average costs per pair: (Click the icon to view the cost information.) Read the Requirement 1. How would accepting the order affect Melrose's operating income? In addition to Prepare the analysis to determine the effect on operating income. (Enter decreases to profits with Expected increase in revenues Expected increase in expenses Expected sunglasses x sunglasses x in operating income In addition to the special order's effect on profits, what other (longer-term qualitative) factors should A. How will Melrose's competitors react? Will they retaliate by cutting their prices and starting B. Will lowering the sale price tarnish Melrose's image as a high-quality brand? C. Will Melrose's other customers find out about the lower sale price Melrose offered to Water D. All of the above E. None of the above Requirements 1. How would accepting the order affect Melrose's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Melrose's managers consider in deciding whether to accept the order? 2. Melrose's marketing manager, Peter Root, argues against accepting the special order because the offer price of $76 is less than Melrose's $84 cost to make the sunglasses. Root asks you, as one of Melrose's staff accountants, to explain whether his analysis is correct. What would you say? correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are If we accept the Water Shades special order, we will incur only of additional cost per pair, which is than the $76 per pair that Water Shades offered. Therefore, we should the special order to the company's operating income. correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special ori the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should operating income. of additional the special or If we accept than the $76 the company's correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are If we accept the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should of additional cost per pair, which is than the $76 the special order to the company's operating income. When deciding whether to accept a special order, we should compare the $76 price Water Shades offered us with our $84 total cost of making the su The additional revenues and the additional costs that we will incur to fill the the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should operating income. Costs that we will incur whether or not we fill the order are revenues we will receive against the differential costs prior to filling the order. revenues we will receive against the differential costs we will incur to fill the order. revenues prior to filling the order against the extra costs we will incur to fill the order. to our decision. This is why comparing the Melrose Sunglasses sell for about $156 per pair. Suppose that the company incurs the following average costs per pair: (Click the icon to view the cost information.) Read the Prepare the analysis to determine the effect on operating income. (Enter decreases to profits with a parentheses or minus sign.) Expected increase in revenues sunglasses x Expected increase in expenses sunglasses Expected in operating income In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Melrose's managers consider in deciding whether to accept the order? A. How will Melrose's competitors react? Will they retaliate by cutting their prices and starting a price war? B. Will lowering the sale price tarnish Melrose's image as a high-quality brand? C. Will Melrose's other customers find out about the lower sale price Melrose offered to Water Shades? If so, will these other customers demand lower sale prices? D. All of the above E. None of the above correct. What would you say? When deciding whether to accept a special order, we should compare the Costs that we will incur whether or not we fill the order are to our decision. This is why comparing the $76 price Water Shades offered us with our $84 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are the Water Shades special order, we will incur only per pair that Water Shades offered. Therefore, we should of additional cost per pair, which is If we accept the special order to the company's operating income