Exercise 7.18 a-c Gruden Company produces golf discs, which it normally sells to retailers for $9 each. The cost of manufacturing 20,000 golf discs is: Materials Labour Variable overhead Fixed overhead Total $9,600 31,000 18,000 42,000 $100,600 Gruden also incurs 5% sales commission ($0.45) on each disc sold. McGee Corporation offers Gruden $4.50 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 $42,000 to $47,100 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.) Incremental contribution margint Incremental cost: Fixed cost Incremental income Exercise 7.23 a-d Bahrat, Inc. produces three separate products from a common process costing $100,800. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. The cost and selling price data for a recent period are as follows: Sales Value at Split-Off Point $50,000 10,100 59,700 Product 12 Product 14 Product 16 Cost to Process Further $100,800 30,100 150,400 Sales Value after Further Processing $190,300 35,700 220,300 Determine the total net income if all products are sold at the split-off point. Total net incomes Determine the total net income if all products are sold after further processing. Total net incomes Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Incremental Profit/(Loss) Decision Product 12 Product 14 Product 16 Determine the total net income using the results from the previous part of the question. Total net incomes