Opal Smith Sunglasses sell for about $151 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Opal Smith has enough idle capacity to accept a one-time-only special order from NYC Glasses for 20,000 pairs of sunglasses at $68 per pair. Opal Smith will not incur any variable marketing expenses for the order. Read the requirements Requit the special order's effect on profits, what other (longer-term qualitative) factors should Opal Smith's managers consider in deciding whether to accept the order? Prepa Data Table "0" for any zero balances. Use parentheses or a minus sian to indicate a decrease in operating income from the special order.) rder Requirements units) Direct materials $ 42 Rever Direct labor 10 Less Variable manufacturing overhead 7 Va Variable marketing expenses. 3 1. How would accepting the order affect Opal Smith's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Opal Smith's managers consider in deciding whether to accept the order? 2. Opal Smith's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $68 is less than Opal Smith's $78 cost to make the sunglasses. Revo asks you, as one of Opal Smith's staff accountants, to explain whether his analysis is correct. Contri 16 Fixed manufacturing overhead Less: $ 78 Total cost. Increa * $2,300,000 total fixed manufacturing overhead / 143,750 pairs of sunglasses Print Done Print Done Opal Smith Sunglasses sell for about $151 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Opal Smith has enough idle capacity to accept a one-time-only special order from NYC Glasses for 20,000 pairs of sunglasses at $68 per pair. Opal Smith will not incur any variable marketing expenses for the order. Read the requirements Requirement 1. How would accepting the order affect Opal Smith's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Opal Smith's managers consider in deciding whether to accept the order? Prepare an incremental analysis to determine the special order's effect on operating income. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (20,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Opal Smith Sunglasses sell for about $151 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Opal Smith has enough idle capacity to accept a one-time-only special order from NYC Glasses for 20,000 pairs of sunglasses at $68 per pair. Opal Smith will not incur any variable marketing expenses for the order. Read the requirements Requit the special order's effect on profits, what other (longer-term qualitative) factors should Opal Smith's managers consider in deciding whether to accept the order? Prepa Data Table "0" for any zero balances. Use parentheses or a minus sian to indicate a decrease in operating income from the special order.) rder Requirements units) Direct materials $ 42 Rever Direct labor 10 Less Variable manufacturing overhead 7 Va Variable marketing expenses. 3 1. How would accepting the order affect Opal Smith's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Opal Smith's managers consider in deciding whether to accept the order? 2. Opal Smith's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $68 is less than Opal Smith's $78 cost to make the sunglasses. Revo asks you, as one of Opal Smith's staff accountants, to explain whether his analysis is correct. Contri 16 Fixed manufacturing overhead Less: $ 78 Total cost. Increa * $2,300,000 total fixed manufacturing overhead / 143,750 pairs of sunglasses Print Done Print Done Opal Smith Sunglasses sell for about $151 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Opal Smith has enough idle capacity to accept a one-time-only special order from NYC Glasses for 20,000 pairs of sunglasses at $68 per pair. Opal Smith will not incur any variable marketing expenses for the order. Read the requirements Requirement 1. How would accepting the order affect Opal Smith's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Opal Smith's managers consider in deciding whether to accept the order? Prepare an incremental analysis to determine the special order's effect on operating income. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (20,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order
