Data table Maritime Income Statement For the Month Ended August 31, 2024 \begin{tabular}{lrr} Sales in Units & 33,000 \\ \hline Net Sales Revenue & $61,000 \end{tabular} Variable Costs: Requirements 1. Identify each cost in the income statement as either relevant or irrelevant to Maritime's decision. 2. Prepare a differential analysis to determine whether Maritime should accept this special sales order. 3. Identify long-term factors Maritime should consider in deciding whether to accept the special sales order. Maritime manufactures flotation vests in Charleston, Suppose Optimum wishes to buy 4,500 vests South Carolina. Maritime's contribution margin income from Maritime. Maritime will not incur any variable statement for the month ended August 31, 2024, contains selling and administrative expenses on the the following data: special order. The Maritime plant has enough (Click the icon to view the cost information.) unused capacity to manufacture the additional vests. Optimum has offered $9 per vest, which is Read the requirements. below the normal sales price of $17. Requirement 1. Identify each cost in the income statement as either relevant Requirement 2. Prepare a differential analysis to determine whether Maritime should accept this special sales Enter decreases to revenue or increases to costs with a parentheses or minus sign.) Expected decrease in fixed manufacturing costs ng whether to accept the special Expected decrease in selling and administrative costs Expected decrease in variable manufacturing costs time's managers also should consic Expected increase in fixed manufacturing costs leir prices and starting a price war? aritime accepted from Optimum? If Expected increase in selling and administrative costs Expected increase in variable manufacturing costs or the same reduced price? E. None of the above Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Maritime's decision. Requirement 2. Prepare a differential analysis to determine whether Maritime should accept this special sales or (Enter decreases to revenue or increases to costs with a parentheses or minus sign.) in operating income Decision: Requirem ould consider in deciding whether to accept the special sale order. operating profits, Maritime's managers also should conside Requirement 2. Prepare a differential analysis to determine whether Maritime should accept this special sales or (Enter decreases to revenue or increases to costs with a parentheses or minus sign.) ideciding whether to accept the special sale Requirement 2. Prepare a differential analysis to determine whether Maritime should accept this special sales order (Enter decreases to revenue or increases to costs with a parentheses or minus sign.) in operating income Decision: Requirement 3. Identify long-term factors Maritime should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Maritime's managers also should consider the following: A. How will Maritime's competitors react? Will they retaliate by cutting their prices and starting a price war? B. Will Maritime's other customers find out about the lower sale price Maritime accepted from Optimum? If so, will these other customers demand lower sale prices? C. Will the special order customer come back again and again, asking for the same reduced price? D. All of the above E. None of the above
