Summer Fun manufactures flotation vests in Miami, Florida. Summer Fun's contribution margin income statement for the most recent month contains the following data: E: (Click the icon to view the cost information.) Suppose Overlook Cruiselines wants to buy 5,500 vests from Summer Fun. Acceptance of the order will not increase Summer Fun's variable marketing and administrative expenses or any of its fixed expenses. The Summer Fun plant has enough unused capacity to manufacture the additional vests. Overlook Cruiselines has offered $10 per vest, which is below the normal sale price of $16. Read the requirements Requirement 1. Prepare an incremental analysis to determine whether Summer Fun 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 x Data Table Incremental Analysis of Special Sales Order Decision Per Unit (5,500 units) Revenue from special order Less variable expense associated with the order: Summer Fun Variable manufacturing costs Contribution Margin Income Statement (Variable Costing) Contribution margin For Sales Volume of 31,000 Units Less: Additional fixed expenses associated with the order Total Sales revenue $ 496,000 Increase (decrease) in operating income from the special order Less variable expenses: Decision Variable manufacturing costs (DM, DL, Variable MOH) 186,000 106,000 Requirement 2. Identify long-term factors Summer Fun should consider in deciding whether to accept the special sales order. Variable operating expenses (selling and administrative) In addition to determining the special order's effect on operating profits, Summer Fun's managers also should consider the following: Contribution margin $ 204,000 Less fixed expenses: O A. Will Summer Fun's other customers find out about the lower sale price Summer Fun accepted from Overlook? If so, will these other customers demand lower sale prices? Fixed manufacturing overhead $ 128,000 OB. Will lowering the sale price tarnish Summer Fun's image as a quality brand? 93,000 Fixed operating expenses (selling and administrative) O C. How will Summer Fun's competitors react? Will they retaliate by cutting their prices and starting a price war? $ (17,000) O D. All of the above. Operating income (loss) O E. None of the above. Print Done