Aqua Fun manufactures flotation vests in Orlando, Florida. Aqua Fun's contribution margin income statement for the most recent month contains the following data (Click the icon to view the cost information.) Suppose Summer Sports Cruiselines wants to buy 5,600 vests from Aqua Fun. Acceptance of the order will not increase Aqua Fun's variable marketing and administrative expenses or any of its fixed expenses. The Aqua Fun plant has enough unused capacity to manufacture the additional vests. Summer Sports Cruiselines has offered $7 per vest, which is below the normal sale price of $16 Read the requirements Requirement 1. Prepare an incremental analysis to determine whether Aqua Fun should accept this special sales order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a negative contribution margin and/or a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (5,600 units) Data Table Revenue from special order Less variable expense associated with the order Variable manufacturing costs Aqua Fun Contribution margin Contribution Margin Income Statement (Variable Costing) Less: Additional fixed expenses associated with the order For Sales Volume of 29,000 Units Increase (decrease) in operating income from the special order Total Sales revenue $ 464,000 Decision: Less variable expenses: Requirement 2. Identify long-term factors Aqua Fun should consider in deciding whether to accept the special sales order. Variable manufacturing costs (DM, DL, Variable MOH) 116,000 In addition to determining the special order's effect on operating profits, Aqua Fun's managers also should consider the following: 107,000 Variable operating expenses (selling and administrative) Contribution margin O A. How will Aqua Fun's competitors react? Will they retaliate by cutting their prices and starting a price war? 241.000 O B. Will Aqua Fun's other customers find out about the lower sale price Aqua Fun accepted from Summer Sports? If so, will these other customers demand lower sale prices? Less fixed expenses: O C. Will lowering the sale price tarnish Aqua Fun's image as a quality brand? Fixed manufacturing overhead 124,000 86.000 O D. All of the above. Fixed operating expenses (selling and administrative) O E. $ 31,000 None of the above. Operating income (loss) Print Done Enter any number in the edit fields and then continue to the next