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Buoy manufactures flotation vests in Charleston, South Carolina. Buoy's contribution margin income statement for the most recent month contains the following data: (Click the icon to view the cost information.) Suppose Optimum Cruiselines wants to buy 5,400 vests from Buoy. Acceptance of the order will not increase Buoy's variable marketing and administrative expenses or any of its fixed expenses. The Buoy plant has enough unused capacity to manufacture the additional vests. Optimum Cruiselines has offered $9 per vest, which is below the normal sale price of $14. Read the requirements. Requirement 1. Prepare an incremental analysis to determine whether Buoy should accept this special sales order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a negative contribution margin and/or a decrease in operating income from the special order.) Total Order Per Unit (5,400 units) Data Table Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Buoy Contribution Margin Income Statement (Variable Costing) For Sales Volume of 32,000 Units Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Total Sales revenue $ 448,000 Decision: 160,000 Requirement 2. Identify long-term factors Buoy should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Buoy's managers also should consider the following: 110,000 Less variable expenses: Variable manufacturing costs (DM, DL, Variable MOH) Variable operating expenses (selling and administrative) Contribution margin Less fixed expenses: Fixed manufacturing overhead $ 178,000 $ O A. How will Buoy's competitors react? Will they retaliate by cutting their prices and starting a price war? O B. Will lowering the sale price tarnish Buoy's image as a quality brand? O c. Will Buoy's other customers find out about the lower sale price Buoy accepted from Optimum? If so, will these other customers demand lower sale prices? OD. All of the above. O E. None of the above. 123,000 90,000 Fixed operating expenses (selling and administrative) $ (35,000) Operating income (loss) Print Done