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Stenback Sunglasses sell for about $195 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the
Stenback Sunglasses sell for about $195 per pair. Suppose the company incurs the following average costs per pair: (Click the icon to view the cost information.) Stenback has enough idle capacity to accept a one-time-only special order from Lens Makers for 23,000 pairs of sunglasses at $71 per pair. Stenback will not incur any variable marketing expenses for the order. Requirements Requirement 1. How would accepting the order affect Stenback's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Stenback'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.) Stenback Incremental Analysis of Special Sales Order Expected increase in revenues Expected increase in expenses: Variable manufacturing cost Fixed manufacturing costs Total expected increase in expenses Expected increase (decrease) in operating income
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