Question: Direct materials $ 43 Direct labor 10 Variable manufacturing overhead 6 Variable marketing expenses 4 20* Fixed manufacturing overhead $ 83 Total cost * $2,100,000

Direct materials $ 43 Direct labor 10 Variable manufacturing overhead 6 Variable marketing expenses 4 20* Fixed manufacturing overhead $ 83 Total cost * $2,100,000 total fixed manufacturing overhead - 105,000 pairs of sunglasses Hilton Stenback Sunglasses sell for about $154 per pair. Suppose the company incurs the following average costs per pair: Click the icon to view the cost information.) Hilton Stenback has enough idle capacity to accept a one-time-only special order from Nevada Glasses for 19,000 pairs of sunglasses at $75 per pair. Hilton Stenback will not incur any variable marketing expenses for the order Read the requirements Requirement 1. How would accepting the order affect Hilton Stenback's operating income? In addition to the special order's effect on profits, what other (longer-term qualitative) factors should Hilton Stenback'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 *o" 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 (19,000 units) Revenue from special order Less variable expense associated with the order Variable manufacturing costs Contribution margin Loss: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order
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