urgent requirement Nautical manufactures floatation vests in Calgary. Nautical's contribution margin income statement for the most recent month contains the following data: Sales in unit.
urgent requirement
Nautical manufactures floatation vests in Calgary. Nautical's contribution margin income statement for the most recent month contains the following data: Sales in unit. 33,000 Sales revenue. $462,000 Variable expenses: Manufacturing. $99,000 Marketing and administrative 106,000 Total variable expenses. 205,000 Fixed expenses: Manufacturing. 122,000 Marketing and administrative 87,000 Total fixed expenses 209,000 Operation income (loss). $48,000 Suppose Overton's wants to buy 4,700 vests from Nautical. Acceptance of the order will not increase Nautical's variable marketing and administrative expenses or any of its fixed expenses. The Nautical plant has enough unused capacity to manufacture the additional vests. Overton's has offered $11 per vest, which is below the normal sale price of$14. 1. Prepare an incremental analysis to determine whether Nautical should accept this special sales order. 2. Which of the below long- term factors should Nautical consider in deciding whether to accept the special sales order. a) Will Overton's cone back again and again, asking for the same reduced price? b) What will be the effect on competitors? Will they view this sale as the start of a price war? c) All of the above d) None of the above
fellosing dais 3,000 Sales is uni 462 000 106.000 Coinbu 257,000 Fixed expenves 122,000 Maradfactarig 87,000 209 000 548,000 Seppose Overton's wants to bay 4,700 vests fron Nasticol. Aoceptance of the ander wil not increase Nauticals varile eketna asd adeuinisonve espises or ary of its fised egpenses The Natical plant egh ned cepecity to manfschee the additional v Overnon's bas offered S 11 per veet, mhich in below the soemal sale price of S 14 Whesh of the bckaw lesug tens factors shouid Nanstioal cotsiler in dciding wlether to accopt the special cles ondex a) Will Overton's comc back agn ad apain asking fie the senc rodaood price? by Wll Nesticats regaler cestoners leam of the special price extesded to Overon's? If so, will in affect Nosticals abilay to selo nocnal price c) What wall be the cfoct ns compettiors? Will they viesw thra sale an the start of a price wor? d) All of dhe abeve e) Noos of the above 2Step by Step Solution
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