Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sylvan Stenback Sunglasses sell for about 5154 per pair Suppose the company incurs the following average costs per pair Click the icon to view the

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Sylvan Stenback Sunglasses sell for about 5154 per pair Suppose the company incurs the following average costs per pair Click the icon to view the cost information) Syvan Stenback has enough idle capacity to accept a one-time-only special order trom Nevada Classen for 17,000 part of sunglasses at $89 per pair Sywan Stenbeck will not incur any variable marketing expenses Read the remot for the order managers considerin deciding whether to accept the order? Requirement 1. How would accepting the order alect Sylvan Shanback's operating Income? In addition to the special orders offect on prottes, what other longer-com qualitative) factors should Syvan Stenbock's Prepare an incremental analysis to determine the special orders offect on operating income (Entera e for any zero balances. Lae parentheses or a minus ign to indicate a decrease in operating income from the special order) Total Order (17,000 units) Per Unit Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order Variable manufacturing costs Enter any number in the edit fields and then click Chuck Answer Sylvan Stenback Sunglasses sell for about 5154 per pair Suppose the company incurs the following average costs per pair Click the icon to view the cost information) Sylvan Stenback has enough idle capacity to accept a one-time-only special order from Nevada Glasses for 17.000 pairs of sunglasses 589 per pair Sylvan Stenback will not incur any variable marketing expenses for the order Read the requirements special order Total Order Per Unit (17.000 units) Incremental Analysis of Special Sales Order Decision Revenue from special order Loss 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 Enter any number in the edit fields and then click Check Answer 1. How would accepting the order affect Sylvan Stenback's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Sylvan Stenback's managers consider in deciding whether to accept the order? 2. Sylvan Stenback's marketing manager, Jim Revo, argues against accepting the special order because the offer price of $89 is less than Sylvan Stenback's $99 cost to make the sunglasses. Revo asks you, as one of Sylvan Stenback's staff accountants, to explain whether his analysis is correct. Direct materials.. $ 60 3 Direct labor.. 13 Variable manufacturing overhead...... 7 Variable marketing expenses 16* Fixed manufacturing overhead $ 99 Total cost $2,000,000 total fixed manufacturing overhead + 125,000 pairs of sunglasses

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Barry Elliott, Jamie Elliott

11th Edition

0273708708, 9780273708704

More Books

Students also viewed these Accounting questions