Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: E: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements O A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? OB. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we accept the order, so these costs are Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these costs are to fill the special order are If we accept LA Glasses' special order, we will incur $ extra cost per pair of sunglasses. Therefore, we should V the special order from The extra LA Glasses accept Enter any number in the edit fields and then continue to the next question. reject Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: E: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements O A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? OB. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we accept the order, so these costs are Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so thes costs are to fill the special order are If we accept LA Glasses' special order, we will incur $ extra cost per pair of sunglasses. Therefore, we should the special order from The extra LA Glasses irrelevant Enter any number in the edit fields and then continue to the next question. relevant Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: 5 (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order When deciding whether to accept a special order, we should compare the extra revenues we will receive against the Costs that we will incur whether or not we fill the order are to our decision. I ?d us with our $82 total cost of making and selling the sunglasses is costs incurrred Specifically material and direct labour tra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we accept the order, so these cost: revenues obtained any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these costs are revenues obtained and extra costs incurred will to fill the special order are The extra LA Glasses. If we accept LA Glasses' special order, we will incur $ extra cost per pair of sunglasses. Therefore, we should the special order from Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: E (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we accept the order, so these costs are Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these 7 costs are to fill the special order are . If we accept LA Glasses' special order, we will incur $ extra cost per pair of sunglasses. Therefore, we should the special order from The extra LA Glasse irrelevant relevant Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair 5 (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? OD. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is wil Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we accept the order, so these costs are V. Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these LA Glasses' special order, we will incur $extra cost per pair of sunglasses. Therefore, we should the special order from costs are fixed costs The extra to fill the spe variable MOH LA Glasses. variable marketing expenses Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: E: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? I C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are V to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our V. Our will whether or not we accept the order, so these costs are Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these costs are irrelevant to fill the special order are If we accept LA Glasses' special order, we will incur $extra cost per pair of sunglasses. Therefore, we should the special order from The extra LA Glasses. relevant Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our will these costs are Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the ad whether or not we accept the order, so nglasses for LA Glasses, so these continue to rise costs are 7 continue to lower to fill the special order are If we accept LA Glasses' special order, we will incur $ extra cost per pair of sungla: the special order from The extra LA Glasses. remain the same Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair 5 (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? OD. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is wil whether or not we accept the order, so Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our these costs are V. Also, as you know, we will not incur any on the special order. These costs will be the same whether o ional 20,000 pairs of sunglasses for LA Glasses, so these costs are fixed costs total costs to fill the special order are The extra LA Glasses. If we accept LA Glasses' special order, we will incur $extra co s. Therefore, we should the special order from variable costs Enter any number in the edit fields and then continue to the next question. ? Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair 5 (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? OD. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is wil whether or not we accept the order, so Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our these costs are V. Also, as you know, we will not incur any on the special order. These costs will be the same whether o ional 20,000 pairs of sunglasses for LA Glasses, so these costs are fixed costs total costs to fill the special order are The extra LA Glasses. If we accept LA Glasses' special order, we will incur $extra co s. Therefore, we should the special order from variable costs Enter any number in the edit fields and then continue to the next question. ? Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: E: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is Our will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our these costs are 7 Also, as you know, we will not incur any on the special order. These costs will b whether or not we accept the order, so not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these costs are 7 fixed costs total costs to fill the special order are . If we accept LA Glasses' special order, we per pair of sunglasses. Therefore, we should the special order from The extra LA Glasses. variable costs Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? OD. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is Our will whether or not we accept the order, so Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasi these costs are V. Also, as you know, we will not incur any on the special order. These cos correct vhether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these misleading costs are to fill the special order are The extra LA Glasses. If we accept LA Glasses' special order, we will incur $extra cost per pair of sunglasses. Therefore, we should the special order from Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: E (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? OB. When should the equipment used to produce sunglasses be refurbished and at what cost? I C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is irrelevant will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we acc these costs are V. Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA relevant costs are The extra to fill the special order are . If we accept LA Glasses' special order, we will incur $ extra cost per pair of sunglasses. Therefore, we should the special order from LA Glasses Enter any number in the edit fields and then continue to the next question. ? Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements I A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? B. When should the equipment used to produce sunglasses be refurbished and at what cost? O C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are V to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the extra costs we will incur to fill the order will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order these costs are V. Also, as you know, we will not incur any on the special or extra fixed costs we will incur to fill the order whether or not we accept the order, so nake the additional 20,000 pairs of sunglasses for LA Glasses, so these total costs of making the sunglasses costs are to fill the special order are The extra LA Glasses. If we accept LA Glasses' special order, we will incur $extra cost per pair of sunglasses. Therefore, we should the special order from Enter any number in the edit fields and then continue to the next question. ? Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: 5 (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements Requirement 1. How would accepting the order affect Smooth's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Smooth's managers consider in deciding whether to accept the order? Prepare the analysis to determine the effect on operating income. (Enter a zero, "0", in an input box if there is no expected change in the expense. Use parentheses or a minus sign for an expected decrease in operating income.) Smooth Incremental Analysis of Special Sales Order Expected increase in revenues Expected increase in expenses: Variable manufacturing cost Data Table - Fixed manufacturing costs Direct materials 43 Total expected increase in expenses 15 Expected increase (decrease) in operating income Direct labour Variable manufacturing overhead. Variable marketing expenses 11 3 In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Smooth's managers consider in deciding whether to accept the or In addition to determining the special order's effect on operating profits, Smooth's managers also should consider the following: (Select all that apply.) 10 Fixed manufacturing overhead. 82 Total cost.......... * $2,100,000 total fixed manufacturing overhead / 210,000 pairs of sunglasse A. Will lowering the sale price tarnish Smooth's image as a high-quality brand? OB. When should the equipment used to produce sunglasses be refurbished and at what cost? I C. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? D. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Print Done Enter any number in the edit fields and then continue to the next question. Smooth Sunglasses sell for about $190 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Smooth has enough idle capacity to accept a one-time-only special order from LA Glasses for 20,000 pairs of sunglasses at $73 per pair. Smooth will not incur any variable marketing expenses for the order. Requirements UD. vineri should the equipment used to produce sunglasses de rerurdisneu anu al wrial COS!! OC. Will Smooth's other customers find out about the lower sale price Smooth offered to LA Glasses? If so, will these other customers demand lower sale prices? OD. How will Smooth's competitors react? Will they retaliate by cutting their prices and starting a price war? Requirement 2. Smooth's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $73 is less than Smooth's $82 cost to make the sunglasses. Revo asks you, as one of Smooth's staff accountants, to write a memo explaining whether his analysis is correct. Date: To: Mr. Jim Revo, Marketing Manager From: Staff Accountant Subject: LA Glasses special order Costs that we will incur whether or not we fill the order are to our When deciding whether to accept a special order, we should compare the extra revenues we will receive against the decision. This is why comparing the $73 price LA Glasses offered us with our $82 total cost of making and selling the sunglasses is will Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for LA Glasses' special order without increasing our Our whether or not we accept the order, so these costs are V. Also, as you know, we will not incur any on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for LA Glasses, so these costs are to fill the special order are The extra LA Glasses. If we accept LA Glasses' special order, we will incur $extra cost per pair of sunglasses. Therefore, we should the special order from Enter any number in the edit fields and then continue to the next