ex 7-2 need step by step explanation how to solve

6. The process used to identily tu action is called incremental analysis 7. Costs that are that are the same under all alternative courses of action someti e under alternative decision. analysis, some costs will always change under al 8. Whe n using increme courses of action, but revenues will not. 9. Variable costs will change under alternative courses of action, but fixed costs will Identify each statement as true or false. If false, indicate how to correct the state Instructions th e ias for E7-2 Gruden Company produces golf discs which it normally sells to retailers for $7 each, special-order decision (LO 2), AN The cost of manufacturing 20,000 golf discs is: Materials Labor Variable overhead Fixed overhead Total s 10,000 30,000 20,000 40,000 $100,000 Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 5,000 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Gruden. If Gruden accepts the offer, its fixed overhead will increase from $40,000 to $46,000 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Instructions (a) Prepare an incremental analysis for the special order (b) Should Gruden accept the special order? Why or why not? (c) What assumptions underlie the decision made in part (b)? E7-3 Moonbeam Company manufactures toasters. For the first 8 7-3 Moonbeam Company manufactures toasters. For the f om pany reported the following operating results while operating at 7