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Coastal Safety manufactures flotation vests in Newark, New Jersey. Coastal Safety's contribution margin income statement for the most recent month contains the following data: Coastal
Coastal Safety manufactures flotation vests in Newark, New Jersey. Coastal Safety's contribution margin income statement for the most recent month contains the following data:
Coastal Safety Contribution Margin Income Statement (Variable Costing) For Sales Volume of 30,000 Units Total Sales revenue 450,000 Less variable expenses: Variable manufacturing costs (DM, DL, Variable MOH) 210,000 112,000 Variable operating expenses (selling and administrative) Contribution margin $ 128,000 Less fixed expenses: Fixed manufacturing overhead $ 130,000 94,000 Fixed operating expenses (selling and administrative) $ (96,000) Operating income (loss) 1. Prepare an incremental analysis to determine whether Coastal Safety should accept this special sales order. 2. Identify long-term factors Coastal Safety should consider in deciding whether to accept the special sales order. Coastal Safety manufactures flotation vests in Newark, New Jersey. Coastal Safety's contribution margin income statement for the most recent month contains the following data: (Click the icon to view the cost information.) Suppose Optimum Cruiselines wants to buy 4,800 vests from Coastal Safety. Acceptance of the order will not increase Coastal Safety's variable marketing and administrative expenses or any of its fixed expenses. The Coastal Safety plant has enough unused capacity to manufacture the additional vests. Optimum Cruiselines has offered $5 per vest, which is below the normal sale price of $15Step by Step Solution
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