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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,400 golf discs is: Materials $9,894 Labor

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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,400 golf discs is: Materials $9,894 Labor 31,040 Variable overhead 19,400 Fixed overhead 37,830 Total $98,164 Gruden also incurs 5% sales commission ($0.36) on each disc sold. McGee Corporation offers Gruden $4.76 per disc for 5,550 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 $37,830 to $42,890 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Net Income Reject Accept Increase Order (Decrease) Order Revenues $ Materials Labor. Variable overhead Fixed overhead Sales commissions Net income (b) Should Gruden accept the special order? Gruden should the special order

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