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Kyler Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per pair: Sylvan Kyler has enough idle capacity to accept a one-time-only special order from NYC Glasses for 20,000 pairs of sunglasses at $69 per pair. Sylvan Kyler will not incur any variable marketing expenses for the order.

Requirement 1. How would accepting the order affect Sylvan Kyler's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Sylvan Kyler's managers consider in deciding whether to accept the order? Prepare an incremental analysis to determine the special order's effect on operating income.

(Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (20,000 units)

Incremental Analysis of Special Sales Order Decision	Per Unit	(20,000 units)
Revenue from special order	______	_______
Less 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		_________

DATA TABLE

Direct materials $38

Direct labor 13

Variable manufacturing overhead 10

Variable marketing expenses 3

Fixed manufacturing overhead 20

* Total cost $84 * $2,000,000 total fixed manufacturing overhead / 100,000 pairs of sunglasses

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