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Current Attempt in Progress Carla Vista Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20.200 golf
Current Attempt in Progress Carla Vista Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20.200 golf discs is: Materials $ 9,090 Labor 29,290 Variable overhead 19,392 Fixed overhead 39,794 Total $97,566 Carla Vista also incurs 8% sales commission ($0.56) on each disc sold. McGee Corporation offers Carla Vista $4.80 per disc for 4,700 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 $5,510 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 Carla Vista accept the special order? Carla Vista should the special order
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