Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blue Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,900 golf discs is: Materials $ 10,994

Blue Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,900 golf discs is:

Materials $ 10,994
Labor 37,045
Variable overhead 25,812
Fixed overhead 46,605
Total $120,456

Blue also incurs 7% sales commission ($0.48) on each disc sold. McGee Corporation offers Blue $4.91 per disc for 5,130 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Blue. If Blue accepts the offer, its fixed overhead will increase from $46,605 to $51,305 due to the purchase of a new imprinting machine. No sales commission will result from the special order.

image text in transcribed

(a) Prepare an incremental analysis for the special order. (Round answers to 0 decimal places, e.g. 1250. If amount decreases net income then enter the amount 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 Fixed overhead Sales commissions Net income $ (b) Should Blue accept the special order? Blue should the special order

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Process Audits And 6 Sigma Excellence To Mitigate Risk And Improve Business Performance

Authors: Mr Indulis Laimonis Svikis

1st Edition

B09M5FPYR4, 979-8769768996

More Books

Students also viewed these Accounting questions

Question

=+(8.56) P"=A, + LA"A. H~2 and IA| Answered: 1 week ago

Answered: 1 week ago