Melrose Sunglasses sell for about $158 per pair, Suppose that the company incurs the folowing average costs per pair: (Click the icon to view the cost information.) Melrose has enough ide capacty to accept a one-time-only special order from Rolling Shades for 19,000 pairs of sunglasses at $71 per pair. Melrose wi not incur any variable selling expenses for the order Road tho rocuirements Requiromont 1. How wou'd accopting tho ordor affoct Malroso's operating inoomo? In addition to the spacial ardor's affodt on profts, what other (ongar-sorm quaitativa) faclors should Melroso's managors consdar in daciding whethor to aooopt the ordor? Proparo the analysis to dotormino tho offect an oporating income. (Enber decroases to profits with a paranthescs or minus sign.) Expectod incroaso in ravenues unglassDGx Expectad increase in oxpensesunglassosx Expectod n operating income In add ton to the spocial ordor's offect on profits, what ather (longor-torm qualitativa) factors should Molrose's managars consder in dociding whether to accopt tho ordor? O A How will Melrose's competitors react? Wil they retaliate by cutting ther prices and starting a price war? B. wil lowering the sale price tarnish Melrose's image asa high-quality brand? n oporatng C. O D. wil Mero se's other astormers find out about the lover sale price Melrose offered to Rolling Shades? If so, will these other customers demand lower sale prices? Al of the above E. None of the above Requirement 2. Malrose's marketing manager, Poter Smith, argues against accopting the spacial order because the offer price af $71 is less than Meirose's $79 cost to maloe the sunglasses. Smith asks you, as one af Merose's staff accountants, to explain whether his analysis is correct What would you say? | Costs that we will incur whether or not we nl the order are | to our decision. This is why comparing the$71 price When deciding whether to acoept a special order, we should compare the Rolling Shades offered us with our 579 fotal cost of making the sunglasses is If we accopt The additional revenues and the additional costs that we will incur to fill the spocial order are the Roling Shades special order, we wil incur only S per pair that Rolling Shades affarod. Therafora, wo should oparating income. of additional cost per pair, which is than the $71 the spocial order to the company's