P8-49A	Special order decision and considerations (learning Objective 3)
Coastal Safety manufactures flotation vest in Miami, Florida.
Coastal Safety's contribution margin income statement for the most recent month contains the following data:
	Coastal Safety
	Contribution Margin Income Statement (Variable Costing)
	For Sales Volume of 32,000 Units
		Per unit
Sales revenue		480,000
Less variable expenses:
	Variable manufacturing costs (DM, DL, Variable MOH)	160,000
	Variable operating expenses (selling and administrative)	112,000
Contribution margin		208,000
Less fixed expenses:
	Fixed manufacturing overhead	126,000
	Fixed operating expenses (selling and administrative)	91,000
Operating income (loss)		-9,000
Suppose Dazzle Cruiselines wants to buy 4,600 vests from Coastal Safety.
Acceptance of the order will not require any variable selling and administrative expenses.
The special order will not affect fixed expenses. The Coastal Safety plant has enough
used capacity to manufacture the additional vests. Dazzle Cruiselines has offered
$7 per vest, which is below the normal sale price of $15.
Requirements
1. Prepare an incremental analysis to determine whether Coastal Safety should accept this special sales order.
2. Identify long-term factors that Coastal Safety should consider in deciding whether to accept the special sales order.