Tolman 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.) Tolman has enough idle capacity to accept a one-time-only special order from Nevada Shades for 26,000 pairs of sunglasses at S83 per pair. Tolman will not incur any variable selling expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Tolman's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Tolman'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.) Expected increase in revenues Expected increase in expenses Expected in operating income sunglasses x sunglasses x In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Tolman's managers consider in deciding whether to accept the order? A. Will Tolman's other customers find out about the lower sale price Tolman offered to Nevada Shades? If so, will these other customers demand lower sale prices? B. Will lowering the sale price tarnish Tolman's image as a high-quality brand? C. How will Tolman's competitors react? Will they retaliate by cutting their prices and starting a price war? OD. All of the above E. None of the above Requirement 2. Tolman's marketing manager, Peter White, argues against accepting the special order because the offer price of $83 is less than Tolman's $86 cost to make the sunglasses. White asks you, as one of Tolman'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 decision. This is why comparing the $83 price Nevada Shades offered us with our $86 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 Costs that we will incur whether or not we fill the order are to our Time Remaining: 01:59:27 Next