Water Works manufactures flotation vests in Moncton. Water Works's contribution margin income statement for the most recent month contains the following data: (Click the icon to view the income statement.) Suppose Boats-n-More wants to buy 5,400 vests from Water Works. Acceptance of the order will not increase Water Works's variable marketing and administrative expenses or any of its fixed expenses. The Water Works plant has enough unused capacity to manufacture the additional vests. Boats-n-More has offered $13 per vest, which is below the normal sale price of $17. Requirements 1. Prepare an incremental analysis to determine whether Water Works should accept this special sales order. 2. Identify long-term factors Water Works should consider in deciding whether to accept the special sales order. Requirement 1. Prepare an incremental analysis to determine whether Water Works should accept this special sales order. (Use parentheses or a minus sign to enter a decrease in operating income.) Water Works Incremental Analysis of Special Sales Order Expected increase in revenue Expected increase in expenses Expected increase (decrease) in operating income Decision: Requirement 2. Identify long-term factors Water Works should consider in deciding whether to accept the special sales order. Which of the following long-term factors should Water Works's managers consider in addition to the effect of the special sale on operating income? O A. Will Water Works's regular customers learn of the special price extended to Boats-n-More? If so, will it affect Water Works's ability to sell at its normal price? OB. Will Boats-n-More come back again and again, asking for the same reduced price? Oc. What will be the effect on competitors? Will they view this sale as the start of a price war? OD. All of the above O E. None of the above 0 Income statement - X Sales in units 32,000 $ 544,000 Sales revenue Variable expenses: Manufacturing ..........$ ........... 160,000 107,000 Marketing and administrative Total variable expenses 267,000 .................. 277,000 Contribution margin Fixed expenses: Manufacturing 127,000 94,000 Marketing and administrative Total fixed expenses 221,000 56,000 Operating income (loss)..... $ Print Done