Newlown Sunglasses sell for about $154 per pair Suppose that the company incurs the folowing average couls per pair Click the icon to view the cost information) Newtown has enough idle capacity to accept a one-time-only special order from Water Shades for 17.000 pairs of sunglasses at $0 por pair. Newtown will not incur any variable seling expenses for the order Read the requirements Requirement 1. How would accepting the order afect Newtown's operating income? In addition to the social order's effect on profits what other longer tem quive factors should Newtown's managers consider in deciding whether to accept the order? Prepare the analysis to determine the effect on Operating income. (Enter decreases to profits with a parentheses or minusson) Expected increase in revenus sunglasses Expected increase in expenses sunglasses Expected in operating income In addition to the special order's effect on profits what the longer tom qualitative factors should Nowtown managers consider in deciding whether to accept the order? Choose from any list or enter any number in the input fields and then continue to the next question A Data Table Direct materials Direct labor Variable manufacturing overhead Variable selling expenses Fixed manufacturing overhead 83 Total cost * $2,050,000 Total fixed manufacturing overhead / 102,500 Pairs of sunglasses Print Done Newtown Sunglasses sell for about 154 per pair. Suppose that the company incurs the following average costs per pair (Click the icon to view the cost information.) Newlown has enough ide capacity to accept a one time.only special order from Water Shados for 17.000 pairs of sunglasses at $80 por pair Newtown will not incur any variable selling expenses for the order. Read the requirements O A How will Newtown's competitors react? Will they retaliate by cutting their prices and starting a price war? OB. Will lowering the sale price tarnish Newtown's image as a high quality brand? OC. Will Newtown's other customers find out about the lower sale price Newtown offered to Water Shades? If so, will these other customers demand lower sale prices? OD. All of the above OE None of the above Requirement 2. Newtown's marketing manager, Peter Kylor, argues against coepting the special order because the offer price of 580 is less than Newtown's $83 cost to make the sunglasses Kyler asks you, as one of Nowtown's staff accountants to explain whether his analysis is correct. What would you say? Requirement 2. Newtown's marketing manager, Peter Kylor, argues against accepting the special order because the offer price of 580 is less than Newtown's $83 cost to make the sunglasses Kyler asks you, as one of Nuwlown's staff accountants, to explain whether his analysis is 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 wo fill the order to our decision. This is why comparing the $80 price Water Shades offered us with our $83 total cost of making the sunglasses The additional revenue and the additional costs that we will incur to the Water Shades social order, we will incur only $ por par that Water Shades offered. Therefore, we should the specin order are L of additional cost per pair, which is the social order to we accept than the be company's $80
