Maritime manufactures flotation vests in Tampa, Florida. Maritime's contribution margin income statement for the month ended January 31, 2010 contains the following data: Suppose Water Works wishes to buy 3,800 vests from Maritime. Acceptance of the order will not increase Maritime's variable marketing and administrative expenses. The Maritime plant has enough unused capacity to manufacture the additional vests. Water Works has offered $8.00 per vest, which is below the normal sale price of $19.

Sales in units 33,000

Sales revenue $627,000

Variable expenses: Manufacturing 99,000

Marketing and administrative 111,000

Total variable expenses 210,000

Contribution margin 417,000

Fixed expenses: Manufacturing 127,000

Marketing and administrative 86,000

Total fixed expenses 213,000

Operating income $204,000

Requirements

1.	Identify each cost in the income statement as either relevant or irrelevant to Maritime's decision.
2.	Prepare an incremental 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.