direct materials $40, direct labor $11, VMO $9, Variable marketing expenses $3, Fixed manufacturing overhead $16, total cost $79. *$2200000 total fixed manufacturing overhead/ $137,500 pairs of sunglasses.

Arthur Rouse Sunglasses sell for about $154 per pair. Suppose the company incurs the following average costs per pair E: (Click the icon to view the cost information.) Arthur Rouse has enough idle capacity to accept a one-time-only special order from Alaska Glasses for 18,000 pairs of sunglasses at $93 per pair. Arthur Rouse will not incur any variable marketing expenses for the order. Read the requirements. Requirement 1. How would accepting the order affect Arthur Rouse's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Arthur Rouse'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 Per Unit (18,000 units) Incremental Analysis of Special Sales Order Decision 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