Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Data table < Question 1 of 3 Maritime Income Statement For the Month Ended October 31, 2024 Sales in Units Net Sales Revenue Variable Costs:
Data table < Question 1 of 3 Maritime Income Statement For the Month Ended October 31, 2024 Sales in Units Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income Print Done 31,000 $ 620,000 93,000 106,000 199,000 421,000 127,000 89,000 216,000 $ 205,000 - X Thi Thi OV e Maritime manufactures flotation vests in Charleston, South Carolina. Maritime's contribution margin income statement for the month ended October 31, 2024, contains the following data: (Click the icon to view the cost information) Read the requirements Suppose Overton wishes to buy 4.200 vests from Maritime. Maritime will not incur any vanable selling and administrative expenses on the special order. The Maritime plant has enough unused capacity to manufacture the additional vests. Overton has offered $15 per vest, which is below the normal sales price of $20 Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Maritime's decision. Variable Manufacturing Costs Variable Selling and Administrative Costs Fixed Manufacturing Costs Fixed Selling and Administrative Costs 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, Mantime's managers also should consider the following: OA. How will Martime's competitors react? Will they retaliate by cutting their prices and starting a price war? OB. Will Maritime's other customers find out about the lower sale price Maritime accepted from Overton? If so, will these other customers demand lower sale prices? OC. Will the special order customer come back again and again, asking for the same reduced price
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started