Suppose Optimum wishes to buy 4,400 vests from Nautical. Nautical will not incur any variable selling and administrative expenses on the special order. The Nautical plant has enough unused capacity to manufacture the additional vests. Optimum has offered $12 per vest, which is below the normal sales price of $18.

- Requirements 1. Identify each cost in the income statement as either relevant or irrelevant to Nautical's decision 2. Prepare a differential analysis to determine whether Nautical should accept this special sales order. 3. Identify long-term factors Nautical should consider in deciding whether to accept the special sales order. 29,000 522,000 87,000 102,000 Nautical Income Statement For the Month Ended August 31, 2024 Sales in Units Net Sales Revenue $ Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs $ Operating Income 189,000 333,000 129,000 89,000 218,000 115,000