Please do not give image format Nautical manufactures flotation vests in Tampa, Florida. Nautical'scontribution margin income statement for the month endedDecember 31, 2024, contains the following data:(Click the icon to view the cost information.)Data tableIncome StatementFor the Month Ended December 31, 2024Sales in UnitsNet Sales RevenueVariable Costs:ManufacturingSelling and AdministrativeTotal Variable CostsContribution MarginNauticalFixed Costs:ManufacturingSelling and AdministrativeTotal Fixed CostsOperating Income$$29,000551,000116,000111,000227,000324,000Suppose Water Works wishes to buy 4,800 vests from Nautical. Nautical will not incur anyvariable selling and administrative expenses on the special order. The Nautical plant has enoughunused capacity to manufacture the additional vests. Water Works has offered $15 per vest,which is below the normal sales price of $19.123,00092,000215,000109,000Xht to Nautical's decision.cept this special sales order. (Enter decreases to revenue or increases to costs with ato accept the special sales order.gers also should consider the following:ted from Water Works? If so, will these other customers demand lower sale prices? Requirement 1. Identify each cost in the income statement as either relevant or irrelevant to Nautical's decision.Variable Manufacturing CostsVariable Selling and Administrative CostsFixed Manufacturing CostsFixed Selling and Administrative CostsRequirement 2. Prepare a differential analysis to determine whether Nautical should accept this special sales order. (Enter decreases to revenue or increases to costs with aparentheses or minus sign.)Decision:in operating income▼▼▼▼Show Transcribed TextRequirement 3. Identify long-term factors Nautical should consider in deciding whether to accept the special sales order.In addition to determining the special order's effect on operating profits, Nautical's managers also should consider the following:O A. Will Nautical's other customers find out about the lower sale price Nautical accepted from Water Works? If so, will these other customers demand lower sale prices?OB. How will Nautical's competitors react? Will they retaliate by cutting their prices and starting a price war?O C. Will the special order customer come back again and again, asking for the same reduced price?OD. All of the aboveO E. None of the above

Differential analysis refers to the process of comparing and contrasting the differences between two…

Nautical manufactures flotation vests in Tampa, Florida. Nautical's contribution margin income statement for the month ended December 31, 2024, contains the following data: (Click the icon to view the cost information.) Data table Income Statement For the Month Ended December 31, 2024 Sales in Units Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Nautical Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income $ $ 29,000 551,000 116,000 111,000 227,000 324,000 123,000 92,000 215,000 109,000 Suppose Water Works wishes to buy 4,800 vests from Nautical. Nautical will not incur any variable selling and administrative expenses on the special order. The Nautical plant has enough unused capacity to manufacture the additional vests. Water Works has offered $15 per vest, which is below the normal sales price of $19. X ht to Nautical's decision. cept this special sales order. (Enter decreases to revenue or increases to costs with a to accept the special sales order. gers also should consider the following: ted from Water Works? If so, will these other customers demand lower sale prices?

Nautical manufactures flotation vests in Tampa, Florida. Nautical's contribution margin income statement for the month ended December 31, 2024, contains the following data: (Click the icon to view the cost information.) Data table Income Statement For the Month Ended December 31, 2024 Sales in Units Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Nautical Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income $ $ 29,000 551,000 116,000 111,000 227,000 324,000 123,000 92,000 215,000 109,000 Suppose Water Works wishes to buy 4,800 vests from Nautical. Nautical will not incur any variable selling and administrative expenses on the special order. The Nautical plant has enough unused capacity to manufacture the additional vests. Water Works has offered $15 per vest, which is below the normal sales price of $19. X ht to Nautical's decision. cept this special sales order. (Enter decreases to revenue or increases to costs with a to accept the special sales order. gers also should consider the following: ted from Water Works? If so, will these other customers demand lower sale prices?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 1CE: Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and...

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