Oakley Sunglasses sell for about $158 per pair. Suppose that the company incurs the following average costs per pair: 33 (Click the icon to view the cost information.) Oakley has enough idle capacity to accept a one-time-only special order from Alaska Shades for 19,000 pairs of sunglasses at $77 per pair. Oakley will not incur any variable selling expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Oakley's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Oakley'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.) Data Table - Expected increase in revenues sunglasses x Expected increase in expenses sunglasses * Expected in operating income Direct materials $ 41 Direct labor 8 X 6 Requirements Variable manufacturing overhead Variable selling expenses Fixed manufacturing overhead 2 $25* $ 82 Total cost * $2,150,000 Total fixed manufacturing overhead / 86,000 Pairs of sunglasses 1. How would accepting the order affect Oakley's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Oakley's managers consider in deciding whether to accept the order? 2. Oakley's marketing manager, Peter McKnight, argues against accepting the special order because the offer price of $77 is less than Oakley's $82 cost to make the sunglasses. McKnight asks you, as one of Oakley's staff accountants, to explain whether his analysis is correct. What would you say? Print Done Print Done