Deep Blue manufactures flotation vests in Charleston, South Carolina. Deep Blue's contribution margin income statement for the month ended July 31, 2018, contains the following data: B (Click the icon to view the cost information.) Suppose Overlook wishes to buy 4,700 vests from Deep Blue. Deep Blue will not incur any variable selling and administrative expenses on the special order. The Deep Blue plant has enough unused capacity to manufacture the additional vests. Overlook has offered $11 per vest, which is below the normal sales price of $18. Read the requirements. i Data Table - X Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Deep Blue's decision. Variable Manufacturing Costs Variable Selling and Administrative Costs Deep Blue Income Statement Fixed Manufacturing Costs For the Month Ended July 31, 2018 Fixed Selling and Administrative Costs Sales in Units 41,000 Requirement 2. Prepare a differential analysis to determine whether Deep Blue should accept this special sales order. (Enter decreases to revenue or increases to costs with $ 738,000 Net Sales Revenue Variable Costs: Manufacturing 205,000 105,000 Selling and Administrative in operating income 310,000 Decision: 428,000 Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Requirement 3. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Deep Blue's managers also should consider the following: 129,000 86,000 Selling and Administrative 215,000 O A. Will Deep Blue's other customers find out about the lower sale price Deep Blue accepted from Overlook? If so, will these other customers demand lower sale prices? RHow will Dean Blue's comnatitore reart? Will they retaliate hy cutting their nrires and starting a nice war Total Fixed Costs 213,000 Operating Income Deep Blue manufactures flotation vests in Charleston, South Carolina. Deep Blue's contribution margin income statement for the month ended July 31, 2018, contains the following data: (Click the icon to view the cost information.) Suppose Overlook wishes to buy 4,700 vests from Deep Blue. Deep Blue will not incur any variable selling and administrative expenses on the special order. The Deep Blue plant has enough unused capacity to manufacture the additional vests. Overlook has offered $11 per vest, which is below the normal sales price of $18. Read the requirements. Data Table - X Fixed Manufacturing Costs Fixed Selling and Administrative Costs Requirement 2. Prepare a differential analysis to determine whether Deep Blue should accept this special sales order. (Enter decreases to revenue or increases to costs with Deep Blue Income Statement For the Month Ended July 31, 2018 Sales in Units 41,000 in operating income $ 738,000 Net Sales Revenue Variable Costs: Decision: Manufacturing Requirement 3. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. 205,000 105,000 Selling and Administrative In addition to determining the special order's effect on operating profits, Deep Blue's managers also should consider the following: 310,000 428,000 O A. Will Deep Blue's other customers find out about the lower sale price Deep Blue accepted from Overlook? If so, will these other customers demand lower sale prices? O B. How will Deep Blue's competitors react? Will they retaliate by cutting their prices and starting a price war? C. Will the special order customer come back again and again, asking for the same reduced price? OD. All of the above O E. None of the above Total Variable Costs Contribution Margin Fixed Costs: Manufacturing 129,000 86,000 Selling and Administrative Total Fixed Costs 215,000 213,000 Operating Income Deep Blue manufactures flotation vests in Charleston, South Carolina. Deep Blue's contribution margin income statement for the month ended July 31, 2018, contains the following data: B (Click the icon to view the cost information.) Suppose Overlook wishes to buy 4,700 vests from Deep Blue. Deep Blue will not incur any variable selling and administrative expenses on the special order. The Deep Blue plant has enough unused capacity to manufacture the additional vests. Overlook has offered $11 per vest, which is below the normal sales price of $18. Read the requirements. i Data Table - X Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Deep Blue's decision. Variable Manufacturing Costs Variable Selling and Administrative Costs Deep Blue Income Statement Fixed Manufacturing Costs For the Month Ended July 31, 2018 Fixed Selling and Administrative Costs Sales in Units 41,000 Requirement 2. Prepare a differential analysis to determine whether Deep Blue should accept this special sales order. (Enter decreases to revenue or increases to costs with $ 738,000 Net Sales Revenue Variable Costs: Manufacturing 205,000 105,000 Selling and Administrative in operating income 310,000 Decision: 428,000 Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Requirement 3. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Deep Blue's managers also should consider the following: 129,000 86,000 Selling and Administrative 215,000 O A. Will Deep Blue's other customers find out about the lower sale price Deep Blue accepted from Overlook? If so, will these other customers demand lower sale prices? RHow will Dean Blue's comnatitore reart? Will they retaliate hy cutting their nrires and starting a nice war Total Fixed Costs 213,000 Operating Income Deep Blue manufactures flotation vests in Charleston, South Carolina. Deep Blue's contribution margin income statement for the month ended July 31, 2018, contains the following data: (Click the icon to view the cost information.) Suppose Overlook wishes to buy 4,700 vests from Deep Blue. Deep Blue will not incur any variable selling and administrative expenses on the special order. The Deep Blue plant has enough unused capacity to manufacture the additional vests. Overlook has offered $11 per vest, which is below the normal sales price of $18. Read the requirements. Data Table - X Fixed Manufacturing Costs Fixed Selling and Administrative Costs Requirement 2. Prepare a differential analysis to determine whether Deep Blue should accept this special sales order. (Enter decreases to revenue or increases to costs with Deep Blue Income Statement For the Month Ended July 31, 2018 Sales in Units 41,000 in operating income $ 738,000 Net Sales Revenue Variable Costs: Decision: Manufacturing Requirement 3. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. 205,000 105,000 Selling and Administrative In addition to determining the special order's effect on operating profits, Deep Blue's managers also should consider the following: 310,000 428,000 O A. Will Deep Blue's other customers find out about the lower sale price Deep Blue accepted from Overlook? If so, will these other customers demand lower sale prices? O B. How will Deep Blue's competitors react? Will they retaliate by cutting their prices and starting a price war? C. Will the special order customer come back again and again, asking for the same reduced price? OD. All of the above O E. None of the above Total Variable Costs Contribution Margin Fixed Costs: Manufacturing 129,000 86,000 Selling and Administrative Total Fixed Costs 215,000 213,000 Operating Income