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Blossom Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,000 golf discs is: Materials Labor Variable
Blossom Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,000 golf discs is: Materials Labor Variable overhead Fixed overhead Total (a) Revenues Blossom also incurs 4% sales commission ($0.28) on each disc sold. McGee Corporation offers Blossom $4.80 per disc for 4,500 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. Materials Labor $ 6,750 Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45)) Variable overhead 21,000 14,250 Net income 29,250 $71,250 Cost of equipment rental Type here to search $ Reject Order $ $ Accept Order NSD $ Net Income Increase (Decrease)
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