Question Help Newtown Sunglasses sell for about $153 per pair. Suppose that the company incurs the following average costs per pair 3. (Click the icon to view the cost information.) Newtown has enough idle capacity to accept a one-time-only special order from Nevada Shades for 22,000 pairs of sunglasses at $81 per pair. Newtown will not incur any variable selling expenses for the order. Read the requirements Data Table Requirement 1. How would accepting the order affect Newtown's operating income? In addition Newtown's managers consider in deciding whether to accept the order? Direct materials $ 36 Prepare the analysis to determine the effect on operating income. (Enter decreases to profits wit Direct labor 10 Expected increase in revenues sunglasses * 8 Variable manufacturing overhead Variable selling expenses Expected increase in expenses sunglasses 3 $25* Expected in operating income Fixed manufacturing overhead $ 82 In addition to the special order's effect on profits, what other (longer-term qualitative) factors shou Total cost * $2,000,000 Total fixed manufacturing overhead / 80,000 Pairs of sunglasses Choose from any list or enter any number in the input fields and then continue to the next Print Done Requirement 1. How would accepting the order affect Newtown's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Newtown'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 sunglasses sunglasses Expected increase in expenses Expected in operating income In addition to the special order's effect on profits, what other longer-term qualitative) factors should Newtown's managers consider in deciding whether to accept the order? Requirement 2. Newtown's marketing manager, Peter McKnight, argues against accepting the special order because the offer price of $81 is less than Newtown's $82 cost to make the sunglasses. Mcknight asks you, as one of Newtown'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 $81 price Nevada Shades offered us with our $82 total cost of making the sunglasses is If we accept than the $81 The additional revenues and the additional costs that we will incur to fill the special order are the Nevada Shades special order, we will incur only of additional cost per pair, which is per pair that Nevada Shades offered. Therefore, we should the special order to operating income the company's In addition to the special order's effect on profits, what other longer-term qualitative) factors should Newtown's managers consider in deciding whether to accept the order? O A. How will Newtown's competitors react? Will they retaliate by cutting their prices and starting a price war? O B. Will lowering the sale price tarnish Newtown's image as a high-quality brand? O C. Will Newtown's other customers find out about the lower sale price Newtown offered to Nevada Shades? If so, will these other customers demand lower sale prices? OD. All of the above O E. None of the above Requirement 2. Newtown's marketing manager, Peter McKnight, argues against accepting the special order because the offer price of $81 is less than Newtown's $82 cost to make the sunglasses. Mcknight asks you, as one of Newtown's staff accountants, to explain whether his analysis is correct. What would you say
