Data Table - X Contribution Margin Income Statement (Variable Costing) For Sales Volume of 28,000 Units Total Sales revenue $ 448,000 Less variable expenses: Variable manufacturing costs (DM, DL, Variable MOH) 168,000 Variable operating expenses (selling and administrative) 103,000 Contribution margin 177,000 Less fixed expenses Fixed manufacturing overhead $ 126,000 Fixed operating expenses (selling and administrative) 89,000 $ Operating income (loss) (38,000) Print Done Deep Blue manufactures flotation vests in Orlando, 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 Overton Cruiselines wants to buy 5,300 vests from Deep Blue. Acceptance of the order will not increase Deep Blue's variable marketing and administrative expenses or any of its fixed expenses. The Deep Blue plant has enough unused capacity to manufacture the additional vests. Overton Cruiselines has offered $12 per vest, which is below the normal sale price of $16. Requirement 1. Prepare an incremental analysis to determine whether Deep Blue should accept this special sales order. Total Order Incremental Analysis of Special Sales Order Decision Per Unit (5,300 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Decision: Requirem ue should consider in deciding whether to accept the special sales orde on operating profits, Deep Blue's managers also should consider the fa Accept the special sales order. Reject the special sales order. In addition fill thou retaliate bring their prices and starting anrico Requirement 2. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Deep Blue's managers also should consider the following: A. How will Deep Blue's competitors react? Will they retaliate by cutting their prices and starting a price war? B. Will Deep Blue's other customers find out about the lower sale price Deep Blue accepted from Overton? If so, will these other customers demand lower sale prices? C. Will lowering the sale price tarnish Deep Blue's image as a quality brand? D. All of the above. O E. None of the above