Newtown Sunglasses sell for about $157 per pair. Suppose that the company incurs the following...
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Newtown Sunglasses sell for about $157 per pair. Suppose that the company incurs the following average costs per pair: BE: (Click the icon to view the cost information.) Newtown has enough idle capacity to accept a one-time-only special order from Colorado Shades for 23,000 pairs of sunglasses at $79 per pair. Newtown will not incur any variable selling expenses for the order. Read the requirements. 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 x X i Data Table Expected increase in expenses sunglasses Expected in operating income Direct materials 43 Direct labor 15 Variable manufacturing overhead 6 Variable selling expenses 2 $20* 86 Fixed manufacturing overhead $ Total cost * $2,400,000 Total fixed manufacturing overhead / 120,000 Pairs of sunglasses nnnn elial Chaale Anauan
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