Shades fo rder. able ddition to th consider in ofits with a B. How will Parkland's competitors react? Will they retaliate by cutting their prices and starting a (1) Time Remaining: 01:59:21 Parkland Sunglasses sell for about $153 per pair. Suppose that the company incurs the following average costs per pair: Click the icon to view the cost information.) Parkland has enough idle capacity to accept a one-time-only special order from Colorado Shades for 18,000 pairs of sunglasses at $83 per pair. Parkland will not incur any variable selling expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Parkland's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Parkland'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.) In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Parkland's managers consider in deciding whether to accept the order? A. Will lowering the sale price tamish Parkland's image as a high-quality brand? B. How will Parkland's competitors react? Will they retaliate by cutting their prices and starting a price war? Parkland Sunglasses sell for about $153 per pair. Suppose that the company incurs the following average costs per pair: Click the icon to view the cost information.) Parkland has enough idle capacity to accept a one-time-only special order from Colorado Shades for 18,000 pairs of sunglasses at \$83 per pair. Parkland will not incur any variable selling expenses for the order. Read the requirements. C. Wil Parkland's other customers find out about the lower sale price Parkland offered to Colorado Shades? If so, will these other customers demand lower sale prices? D. All of the above E. None of the above Requirement 2. Parkland's marketing manager, Peter White, argues against accepting the special order because the offer price of $83 is less than Parkland's $87 cost to make the sunglasses. White asks you, as one of Parkland'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 $83 price Colorado Shades offered us with our $87 fotal cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are If we accept Parkland Sunglasses sell for about $153 per pair. Suppose that the company incurs the following average costs per pair: Click the icon to view the cost information.) Parkland has enough idle capacity to accept a one-time-only special order from Colorado Shades for 18,000 pairs of sunglasses at $83 per pair. Parkland will not incur any variable selling expenses for the order. Read the requirements. Requirement 2. Parkland's marketing manager, Peter White, argues against accepting the special order because the offer price of \$83 is less than Parkland's \$87 cost to make the sunglasses. White asks you, as one of Parkland's staff accountants, to explain whether his analysis is correct. What would you say? Josts that we win incur whether or not we fill the order are to our decision. This is why comparing the $83 price Colorado Shades offered us with our $87 total cost of making the sunglasses is The additional revenues and the additional costs that we will incur to fill the special order are If we accept the Colorado Shades special order, we will incur only of additional cost per pair, which per pair that Colorado Shades offered. Therefore, we is than the $83 should the special order to the company's operating income
