Deep Sea manufactures flotation vests in Charleston, South Carolina. Deep Sea's contribution margin income statement for the month ended March 31, 2024, contains the following data: (Click the icon to view the cost information.) Suppose Optimum wishes to buy 4,800 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. Optimum has offered $6 per vest, which is below the normal sales price of $14. Read the requirements. 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 managers also should consider the following: O A. Will Deep Sea's other customers find out about the lower sale price Deep Sea accepted from Optimum? If so, will these other customers demand lower sale prices? B. Will the special order customer come back again and again, asking for the same reduced price? C. How will Deep Sea's competitors react? Will they retaliate by cutting their prices and starting a price war? O D. All of the above O E. None of the above 30,000 420,000 90,000 107,000 Income Statement For the Month Ended March 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 197,000 223,000 126,000 90,000 216,000 7,000 X i Requirements 1. Identify each cost in the income statement as either relevant or irrelevant to Deep Sea's decision. 2. Prepare a differential analysis to determine whether Deep Sea should accept this special sales order. 3. Identify long-term factors Deep Sea should consider in deciding whether to accept the special sales order