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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,100 golf discs is: Materials $ 7,852
Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,100 golf discs is: Materials $ 7,852 Labor 21,744 Variable overhead 14,496 Fixed overhead 30,502 Total $74,594 Gruden also incurs 6% sales commission ($0.43) on each disc sold. McGee Corporation offers Gruden $4.95 per disc for 4,590 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 $30,502 to $35,342 due to the purchase of a new imprinting machine. No sales commission will result from the special order. (e) Prepare an incremental analysis for the special order. (Round answers to O decimal places, e.g. 1250. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) (a) Prepare an incremental analysis for the special order. (Round answers to O decimal places, e.g. 1250. Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).) Reject Order Revenues $ Materials Labor Variable overhead Fixed overhead Sales commissions Accept Order $ Net income $ $ $ Net Income Increase (Decrease) Should Gruden accept the special order? Gruden should the special order
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