Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 18,600 golf discs is:

Materials		$ 8,556
Labor		29,016
Variable overhead		19,530
Fixed overhead		37,572
Total		$94,674

Gruden also incurs 7% sales commission ($0.49) on each disc sold. McGee Corporation offers Gruden $5.00 per disc for 4,700 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 $37,572 to $43,302 due to the purchase of a new imprinting machine. No sales commission will result from the special order. (a) Prepare an incremental analysis for the special order.

	Reject Order		Accept Order		Net Income Increase (Decrease)
Revenues		$enter revenues in dollars		$enter revenues in dollars		$enter revenues in dollars
Materials		enter materials in dollars		enter materials in dollars		enter materials in dollars
Labor		enter labor in dollars		enter labor in dollars		enter labor in dollars
Variable overhead		enter variable overhead in dollars		enter variable overhead in dollars		enter variable overhead in dollars
Fixed overhead		enter fixed overhead in dollars		enter fixed overhead in dollars		enter fixed overhead in dollars
Sales commissions		enter sales commissions in dollars		enter sales commissions in dollars		enter sales commissions in dollars
Net income		$enter net income in dollars		$enter net income in dollars		$enter net income in dollars

Should Gruden accept the special order?

Gruden should (accept or reject) the special order.