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Newtown Sunglasses sell for about $151 per pair. Suppose that the company incurs the following average costs per pair: (Click the icon to view the
Newtown Sunglasses sell for about $151 per pair. Suppose that the company incurs the following average costs per pair: (Click the icon to view the cost information.) Read the requirements Prepare the analysis to determine the effect on operating income. (Enter decreases to profits with a parentheses or minus sign.) \begin{tabular}{ll} Expected increase in revenues & sunglasses \\ Expected increase in expenses & sunglasses \\ Expected in operating income & \end{tabular} In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Newtown's managers consider in deciding whether to accept the order? A. Will Newtown's other customers find out about the lower sale price Newtown offered to Colorado Shades? If so, will these other customers demand lower sale prices? B. How will Newtown's competitors react? Will they retaliate by cutting their prices and starting a price war? C. Will lowering the sale price tarnish Newtown's image as a high-quality brand? D. All of the above E. None of the above 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 we fill the order are to our decision. This is why comparing the $94 price Colorado Shades offered us with our $95 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 Colorado Shades special order, we will incur only per pair that Colorado Shades offered. Therefore, we should operating income. the special order to the company's Data table
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