Deep Sea Income Statement For the Month Ended May 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 30,000 $ 510,000 90,000 104,000 194,000 316,000 129,000 91,000 220,000 $ 96,000 Deep Sea manufactures flotation vests in Charleston, South Carolina Deep Sea's contribution margin income statement for the month ended May 31, 2024, contains the following data (Click the icon to view the cost information.) Read the requirements Suppose Overtown wishes to buy 4,400 vests from Deep Sea Deep Sea will not incur any variable selling and administrative expenses on the special order The Deep Sea plant has enough unused capacity to manufacture the additional vests Overtown has offered $10 per vest, which is below the normal sales price of $17 Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Deep Sea'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 Deep Sea 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 Deep Sea should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Deep Sea's mapagers also should consider the following OA. Will Deep Sea's other customers find out about the lower sale price Deep Sea accepted from Overtown? If so, will these other customers demand lower sale prices? OB. How will Deep Sea's competitors react? Will they retaliate by cutting their prices and starting a price war? OC. Will the special order customer come back again and again, asking for the same reduced price? OD. All of the above OE. None of the above