Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per​ pair: Direct materials. . . . . . . . . . . . . . . . . . . . . . . $42 Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Variable manufacturing overhead. . . . . . . . 9 Variable marketing expenses. . . . . . . . . . . 2 Fixed manufacturing overhead. . . . . . . . . . 20* Total cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . $84 * $2,200,000 total fixed manufacturing overhead ÷ 110,000 pairs of sunglasses   ​Jasper Cole has enough idle capacity to accept a​ one-time-only special order from Montana Glasses for 17,000 pairs of sunglasses at $72 per pair. Jasper Cole will not incur any variable marketing expenses for the order. 1. How would accepting the order affect Jasper Cole's operating​ income? In addition to the special​ order's effect on​ profits, what other​ (longer-term qualitative) factors should Jasper Cole's managers consider in deciding whether to accept the​ order?     Total Order Incremental Analysis of Special Sales Order Decision Per Unit (17,000 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 - ?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Jasper Cole
Sunglasses sell for about $152 per pair. Suppose the company incurs the following average costs per​ pair:
Direct materials. . . . . . . . . . . . . . . . . . . . . . .
$42
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Variable manufacturing overhead. . . . . . . .
9
Variable marketing expenses. . . . . . . . . . .
2
Fixed manufacturing overhead. . . . . . . . . .
20*
Total cost. . . . . . . . . . . . . . . . . . . . . . . . . . . .
$84
* $2,200,000 total fixed manufacturing overhead ÷ 110,000 pairs of sunglasses
 
​Jasper Cole has enough idle capacity to accept a​ one-time-only special order from
Montana Glasses for 17,000 pairs of sunglasses at $72 per pair. Jasper Cole will not incur any variable marketing expenses for the order.
1.
How would accepting the order affect Jasper Cole's operating​ income? In addition to the special​ order's effect on​ profits, what other​ (longer-term qualitative) factors should Jasper Cole's managers consider in deciding whether to accept the​ order?
 
 
Total Order
Incremental Analysis of Special Sales Order Decision
Per Unit
(17,000 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
-
?
put the answers in the schedule please
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