Blossom also incurs 4% sales commission ($0.28) on each disc sold. McGee Corporation offers Blossom $5.00 per disc for 5,300 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Blossom. If Blossom accepts the offer, it will incur a one-time fixed cost of $4,500 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 e.g. -45 or parentheses e.g. (45).)

REJECT ORDER ACCEPT ORDER NET INCOME INCREASE(DECREASE)

Revenues

Materials

Labor

Variable overhead

Cost of equipment rental

Net income

(b) Should Blossom accept the special order?

Blossom should select an option acceptreject the special order .