Deep Blue manufactures flotation vests in Tampa, Florida. Deep Blue's contribution margin income statement for the most recent month contains the following data: (Click the icon to view the cost information.) Suppose Boat Safety Cruiselines wants to buy 5,400 vests from Deep Blue. Acceptance of the order will not require any variable selling and administrative expenses. The special order will not affect fixed expenses. The Deep Blue plant has enough unused capacity to manufacture the additional vests. Boat Safety Cruiselines has offered $5 per vest, which is below the normal sale price of $15. Read the requirements. Requirement 1. Prepare an incremental analysis to determine whether Deep Blue should accept this special sales order. (Enter a "C" 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 A Data Table Incremental Analysis of Special Sales Order Decision Per Unit (5,400 units) Revenue from special order Less variable expense associated with the order: A B Variable manufacturing costs 1 Deep Blue Contribution margin 2 Contribution Margin Income Statement (Variable Costing) Less: Additional fixed expenses associated with the order 3 For Sales Volume of 28,000 Units 4 Increase (decrease) In operating Income from the special order Total S Sales revenue $ 420.000 Decision 6 Less variable expenses: Requirement 2. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. 7 Variable manufacturing costs (DM, DL, Variable MOH) 196.000 In addition to determining the special order's effect on operating profits, Deep Blue's managers also should consider the following: & Variable operating expenses (selling and administrative) 109,000 O A. Will lowering the sale price tarnish Deep Blue's image as a quality brand? 9 Contribution margin $ 115,000 O B. How will Deep Blue's competitors react? Will they retaliate by cutting their prices and starting a price war? 10 Less fixed expenses: OC. Will Deep Blue's other customers find out about the lower sale price Deep Blue accepted from Boat Safety? If so, will these ou 11 Fixed manufacturing overhead $ 121,000 OD. All of the above. 12 Fixed operating expenses (selling and administrative) 94,000 O E. None of the above. 13 Operating income (loss) $ $ (100,000) Enter any number in the edit fields and then continue to the next question. ? Print Done