Number 3:

Melrose 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. 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.) ExpectedincreaseinrevenuesExpectedincreaseinexpensesExpectedsunglassesxsunglassesinoperatingincome A. How will Melrose's competitors react? Will they retaliate by cutting their prices and starting a price war? B. Will Melrose's other customers find out about the lower sale price Melrose offered to Utah Shades? If so, will these other customers demand lower sale prices? C. Will lowering the sale price tarnish Melrose's image as a high-quality brand? D. All of the above E. None of the above Melrose'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 we fill the order are to our decision. This is why comparing the $87 price Utah Shades offered us with our $92 total cost of making the sunglasses is Data table 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 Preston, argues against accepting the special order because the offer price of $87 is less than Melrose's $92 cost to make the sunglasses. Preston asks you, as one of Melrose's staff accountants, to explain whether his analysis is correct. What would you say