Sate Sailing manufactures flotation vests in Charleston, South Carolina. Safe Sailing's contribution margin income statement for the month ended August 31, 2018 contains the following data: (Click the icon to view the cost information.) Suppose Rafter wishes to buy 3,900 vests from Sate Sailing. Safe Sailing will not incur any variable selling and administrative expenses on the special order. The Safe Sailing plant has enough unused capacity to manufacture the additional vests. Rafter has offered $11 per vest, which is below the normal sales price of $17. Read the requirements. i Data Table Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Safe Sailing's decision. Variable Manufacturing Costs Variable Selling and Administrative Costs Fixed Manufacturing Costs Fixed Selling and Administrative Costs Safe Sailing Income Statement For the Month Ended August 31, 2018 Sales in Units Net Sales Revenue $ Variable Costs: 40,000 680,000 Requirement 2. Prepare a differential analysis to determine whether Safe Sailing should accept this special sales order. (Enter decreases to revenue or increases to costs with a parentheses or minus sign.) Manufacturing 200,000 106,000 306,000 374,000 Jin operating income Decision: Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Requirement 3. Identify long-term factors Safe Sailing should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Safe Sailing's managers also should consider the following: 123,000 95,000 218,000 156,000 $ Operating Income - X Print Done O A. Will Safe Sailing's other customers find out about the lower sale price Safe Sailing accepted from Rafter? If so, will these other customers demand lower sale prices? OB. Will the special order customer come back again and again, asking for the same reduced price? OC. How will Safe Sailing's competitors react? Will they retaliate by cutting their prices and starting a price war? i Requirements OD. All of the above O E. None of the above 1. Identify each cost in the income statement as either relevant or irrelevant to Safe Sailing's decision. 2. Prepare a differential analysis to determine whether Safe Sailing should accept this special sales order. 3. Identify long-term factors Safe Sailing should consider in deciding whether to accept the special sales order. Print Done Choose from any list or enter any number in the input fields and then continue to the next