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Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 16,700 golf discs is: Materials $ 8,350
Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 16,700 golf discs is: Materials $ 8,350 Labor 24,883 Variable overhead 17,702 Fixed overhead 32,899 Total $83.834 Crane also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Crane $4.80 per disc for 5,100 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, it will incur a one-time fixed cost of $5,880 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. apacity to accommodate the (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the numbereg.-45 or parentheses eg: (45).) Rejed Order Accept Order Net Income Increase (Decrease) Revenues $ $ $ Materials Labor Variable overhead Cost of equipment rental Net income $ (b) Should Crane accept the special order? Crane should the speciel order. Active NAS
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