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Sail On manufactures flotation vests in Charleston, South Carolina. Sail On's contribution margin income statement for the month ended March 31, 2024, contains the following

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Sail On manufactures flotation vests in Charleston, South Carolina. Sail On's contribution margin income statement for the month ended March 31, 2024, contains the following data: (Click the icon to view the cost information) Read the recuirements. Suppose Overlook wishes to buy 3,900 vests from Sail On. Sail On will not incur any variable selling and administrative expenses on the special order. The Sal On plant has enough unused capacity to manufacture the additional vests. Overicok has offered $7 per vest, which is below the normal sales price of $14, Data table Requirements 1. Identify each cost in the income statement as either relevant or irrelervant to Sail Or's decision. 2. Prepare a differential analysis to determine whether Sail On should accept this special saies order. 3. Identify long-term factors Sal On should consider in deciding whether to aceept the special sales order. to accet Pgers also snould consiaer the rosowing: pted from Overlook? If so, will these other cuslomers demand lower sale prices? Sail On manufactures flotation vests in Charlestion, South Carolina. Sail On's contribution margin Suppose Overlook wishes to buy 3,900 vests from Sail On. S. Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Sal Oris decision. Requirement 2. Prepare a dillerenfial analysis to determine whether Sail On should accept this special sales order. (Enter decroases to revenue or increases to costs wit minus sign.) Decision: Requirement 3. Identify long-term factors Sal On should consider in deciding whether to accept the spocial sales order. In addition to determining the special order's effect on operating profls, Sall Ors managers also should consider the following: A. Wit Sail On's other customers find out about the lower sale price Sali On accepted from Overlook? If so, will these other customers domand iower sale prices? B. How will Sall On's competitars react? Wa they retaliate by cutting their peloes and starting a price war? C. Wit the special order customer come back again and again, asking for the same reduced price? D. All of the above

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