Sailor Products, Inc., manufactures flotation vests in San Diego, California. Sailor ­Products’ contribution margin income statement for the most recent month contains the following data:

Suppose Parker Cruiselines wishes to buy 5,500 vests from Sailor Products. Acceptance of the order will not increase Sailor Products’ variable marketing and administrative expenses. The Sailor Products plant has enough unused capacity to manufacture the additional vests. Parker Cruiselines has offered $ 4 per vest, which is below the normal sale price of $ 14.

1. Prepare an incremental analysis to determine whether Sailor Products should accept this special sales order.
2. Identify long- term factors Sailor Products should consider in deciding whether to ­accept the special salesorder.

  • CreatedAugust 27, 2014
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