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perp Icon to view the cost information.) has enough idle capacity to accept a one-time-only special order from Rolling Glasses for 23,000 pairs $82 per pair. Adom.Wito will uirements. Data Table the ander - Requirements 1. How would accepting the order affect Arthur White's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Arthur White's managers consider in deciding whether to accept the order? 2. Arthur White's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $82 is less than Arthur White's $91 cost to make the sunglasses. Revo asks you, as one of Arthur White's staff accountants, to explain whether his analysis is correct. Print Done ional fixed exp Print Done ecrease) in opel imber in the edit fields and then click Check Answer fathe ander. $ er a "0" White has enough idle capacity to accept a one-time-only special order from Rolling Glasses for 23 sses at $82 per pair. A. White will he requirements. i Data Table X ement 1. How would n to the en profits, what other der in d pt the order? Direct materials... 50 an incremental anal Es. Use parentheses Direct labor.. 14 eciala Variable manufacturing overhead...... 7 Total 4 Incremental Analys Variable marketing expenses $3,000 e from special orde Fixed manufacturing overhead $ 91 riable expense asso Total cost * $2,200,000 total fixed manufacturing overhead + able manufacturing 137,500 pairs of sunglasses ution margin Editional fixed exp Print Done 16* $ (decrease) in opel E8-22A (similar to) Question Help Arthur White Sunglasses sell for about $145 per pair. Suppose the company incurs the following average costs per pair B (Click the icon to view the cost information.) Arthur White has enough idle capacity to accept a one-time-only special order from Rolling Glasses for 23,000 pairs of sunglasses at $82 per pair Arthur White will not incur any variable marketing expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Arthur White's operating income? In addition to the special order effect on profits, what other (longer-term qualitative) factors should Arthur White's managers consider in deciding whethe to accept the order? Prepare an incremental analysis to determine the special order's effect on operating income. (Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Per Unit (23,000 units) 82 Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin MINE Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Check Answer 061
