Newtown Sunglasses sell for about 5154 per pair. Suppose that the company incurs the following average costs 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 $80 per pair. Newtown will not incur any variable selling expenses for the order Read the quirements Requirement 1. How would accepting the order affect Newtown's operating income? 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? 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 sunglasses Expected increase in expenses Expected in operating incomo dewtown Sunglasses sell for about $154 per pair. Suppose that the company incurs the following average costs per nair (Click the icon to view the cost information.) Data Table Requirements Direct materials $ 39 15 1. How would accepting the order affect Newtown's operating income? 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? 2. Newtown's marketing manager, Peter Kyler, argues against accepting the special order because the offer price of $80 is less than Newtown's $83 cost to make the sunglasses. Kyler asks you, as one of Newtown's staff accountants, to explain whether his analysis is correct. What would you say? Direct labor Variable manufacturing overhead Variable selling expenses 6 3 $20 Fixed manufacturing overhead 83 Total cost * $2,050,000 Total fixed manufacturing overhead / 102,500 Pairs of sunglasses Print Done Print Done hoose from any list or enter any number in the input fields and then click Check Answer Snappy Plants operates a commercial plant nursery where it propagates plants for garden centers throughout the region Snappy Plants has $5,100,000 in assets. Its yearly fixed costs are $650,000, and the variable costs for the potting soil, container, label, seedling, and labor for each gallon-size plant total $1.90. Snappy Plants' volume is currently 500,000 units. Competitors offer the same plants, at the same quality, to garden centers for $4.25 each. Garden centers then mark them up to sell to the public for $9 to $12, depending on the type of plant. Read the requirements Requirement 1. Snappy Plants' owners want to earn an 11% return on investment on the company's assets. What is Snappy Plants' target full product cost? Revenue at current market price 950000 Less: Desired profit Target full product cost Choose from any list or enter any number in the input fields and then click Check Answer plants for cardon centers throughout the region Snann Plants has $5.100.000 in assets te vaadw.fixed costs are $650,0 ants i Requirements - X 1. Snappy Plants' owners want to earn an 11% return on investment on the company's assets. What is Snappy Plants' target full product cost? 2. Given Snappy Plants' current costs, will its owners be able to achieve their target profit? 3. Assume Snappy Plants has identified ways to cut its variable costs to $1.75 per unit. What is its new target fixed cost? Will this decrease in variable costs allow the company to achieve its target profit? 4. Snappy Plants started an aggressive advertising campaign strategy to differentiate its plants from those grown by other nurseries. Snappy Plants does not expect volume to be affected, but it hopes to gain more control over pricing. If Snappy Plants has to spend $105,000 this year to advertise and its variable costs continue to be $1.75 per unit, what will its cost-plus price be? Do you think Snappy Plants will be able to sell its plants to garden centers at the cost-plus price? Why or why not? Print Done Click Check