Sail On manufactures flotation vests in Charleston, South Carolina. Sail On's contribution margin income statement for the month ended May 31, 2018, contains the following data: E: (Click the icon to view the cost information.) Suppose Overton wishes to buy 4,700 vests from Sail On. Sail On will not incur any variable selling and administrative expenses on the special order. The Sail On plant has enough unused capacity to manufacture the additional vests. Overton has offered $9 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 Sail On's decision. Variable Manufacturing Costs Data Table Variable Selling and Administrative Costs Fixed Manufacturing Costs Sail On Fixed Selling and Administrative Costs Income Statement Requirement 2. Prepare a differential analysis to determine whether Sail On should accept this special sales order. (Enter decreases to revenue or increases to costs with a parentheses or minus sign.) For the Month Ended May 31, 2018 Sales in Units 42,000 Net Sales Revenue $ 588,000 Variable Costs: in operating income Manufacturing Selling and Administrative 210,000 110,000 Decision Total Variable Costs 320,000 Requirement 3. Identify long-term factors Sail On should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Sail On's managers also should consider the following: 268,000 Contribution Margin Fixed Costs: Manufacturing 126,000 85,000 O A. How will Sail On's competitors react? Will they retaliate by cutting their prices and starting a price war? O B. Will the special order customer come back again and again, asking for the same reduced price? O C. Will Sail On's other customers find out about the lower sale price Sail On accepted from Overton? If so, will these other customers demand lower sale prices? OD. All of the above O E. None of the above Selling and Administrative Total Fixed Costs 211,000 $ 57,000 Operating Income Print Done