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2 of 13 View Policies Current Attempt in Progress -18 Carla Vista Company produces golf discs which it normally sells to retailers for $7 each.
2 of 13 View Policies Current Attempt in Progress -18 Carla Vista Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,600 golf discs is: Materials $ 12,036 Labor 35,400 Variable overhead 23,128 Fixed overhead Total 47,200 $117,764 Carla Vista also incurs 8% sales commission ($0.56) on each disc sold. McGee Corporation offers Carla Vista $4.90 per disc for 4,900 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Carla Vista. If Carla Vista accepts the offer, it will incur a one-time fixed cost of $6,500 due to the rental of an imprinting machine. No sales commission will result from the special order. Assume there is sufficient capacity to accommodate the special order. (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Revenues Materials Labor Variable overhead Cost of equipment rental Net income Reject Order Accept Order $ $ Net Income Increase (Decrease) (b) Should Carla Vista accept the special order? Carla Vista should the special order
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