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Exercises EX-2:29 226: Use incremental analysis for Special - order decision ABC Company produces golf discs which it normally. sells to retailers for $feach. The
Exercises EX-2:29 226: Use incremental analysis for Special - order decision ABC Company produces golf discs which it normally. sells to retailers for $feach. The cost of manufacturing 20,000 golf discs is: o Materials Labor Variable overhead Fixed overhead $ 10.000 30,000 20,000 40.000 $ 100,000 Jotal ABC also incurs Sl sales Commission ($ 0.35) on each dise sold_ xy2 Corporation offers ABC $4.80 per disc for Sicoo discs. XY 2 would sell the discs under 5,000 its own brand name in foreign markets not yet served by ABC. If ABC accepts the offer, its fixed overhead will increase from $40,000 to $46,000 due to the purchase of anew imprinting machine. No Sales Commission will result from the special order. Required: Q-Prepare an incremental analysis for the special order. be Should ABC accept the special order ? why or why not? C- What assumptions under lie the decision made in Part 6)
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