Marine Supply manufactures flotation vests in Chattanooga, Tennessee. Marine Supply's contribution margin income stateme

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Marine Supply Manufactures Flotation Vests In Chattanooga Tennessee Marine Supply S Contribution Margin Income Stateme 1 (10.61 KiB) Viewed 23 times

Marine Supply Manufactures Flotation Vests In Chattanooga Tennessee Marine Supply S Contribution Margin Income Stateme 2 (66.22 KiB) Viewed 23 times

Marine Supply Manufactures Flotation Vests In Chattanooga Tennessee Marine Supply S Contribution Margin Income Stateme 3 (24.24 KiB) Viewed 23 times

Marine Supply Manufactures Flotation Vests In Chattanooga Tennessee Marine Supply S Contribution Margin Income Stateme 4 (23.44 KiB) Viewed 23 times

Marine Supply manufactures flotation vests in Chattanooga, Tennessee. Marine Supply's contribution margin income statement for the most recent month contains the following dat (Click the icon to view the cost information) Suppose Boat Safety Chuiselines wants to buy 5,100 vests from Marine Supply. Acceptance of the order will not require any variable selling and administrative expenses. The special order will not affect fleed expenses. The Marine Supply p has enough unused capacity to manufacture the additional vests Boat Safety Cruiselines has offered $12 per vest, which is below the normal sale price of $16 Read the requirements CEE
A 1 Marine Supply 2 Contribution Margin Income Statement (Variable Costing) 3 For Sales Volume of 31,000 Units 4 Sales revenue Less variable expenses: Variable manufacturing costs (DM, DL, Variable MOH) Variable operating expenses (selling and administrative) Fixed manufacturing overhead Fixed operating expenses (selling and administrative) 5 6 7 8 9 Contribution margin 10 Less fixed expenses: 11 12 13 Operating income (loss) $ $ $ $ B Total 496,000 186,000 104,000 206,000 123,000 93,000 (10,000)
1. Prepare an incremental analysis to determine whether Marine Supply should accept this special sales order. 2. Identify long-term factors Marine Supply should consider in deciding whether to accept the special sales order.
Requirement 1. Prepare an incremental analysis to determine whether Marine Supply should accept this special sales order (Enter a0" for any zero balances. Use parentheses or a minus sign to indicate a negative contribution marginandora decrease in operating income from the special order) Incremental Analysis of Special Sales Order Decision Total Order (5,100 units) Per Unit 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 Requirement 2. Identify long term factors Martine Supply should consider in deciding whether to accept the special sales onder In addition to detaining the special order's effect on operating profits, Marine Supply's managers also should consider the towing OA W Marine Supply's other customers find out about the lower sole price Mare Supply accepted from Boot Salety? If s customers demand tower se price? OB. How will Marine Supply's competitors react? Wis they retaliate by cutting their prices and starting a pwa? OG Wilkowning the sale price tamian Marine Suppty's images aquity brand? OD Motatove OE None of the above