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P8-49A Special order decision and considerations (Learning Objective 3,) Coastal Safety manufactures flotation vests in Miami, Florida. Coastal Safety's contribution margin income statement for the
P8-49A Special order decision and considerations (Learning Objective 3,) Coastal Safety manufactures flotation vests in Miami, Florida. Coastal Safety's contribution margin income statement for the most recent month contains the following data Coastal Safety Contribution Margin Income Statement (Variable Costing) For Sales Volume of 32,000 Units Per unit 6 Sales revenue 7 Less variable expenses: Variable manufacturing costs (DM, DL, Variable MOH Variable operating expenses (selling and administrati 160,000 112,000 1o Contribution margin 11 Less fixed expenses 2 Fixed manufacturing overhead 13 Fixed operating expenses (selling and administrative) 91,000 14 9 126 erating income (loss Suppose Dazzle Cruiselines wants to buy 4,600 vests from Coastal Safety Acceptance of the order will not require any variable selling and administrative expenses. The special order will not affect fixed expenses. The Coastal Safety plant has enough unused capacity to manufacture the additional vests. Dazzle Cruiselines has offered $7 per vest, which is below the normal sale price of $15
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