Gruden Company produces golf discs, which it normally sells to retailers for $10each. The cost of manufacturing20,400golf discs is:

Materials: $9,996

Labour: 31,620

Variable overhead: 19,992

Fixed overhead: 43,000

Total :$104,608

Gruden also incurs5% sales commission ($0.50) on each disc sold.

McGee Corporation offers Gruden $5.00per disc for5,100discs. 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 $43,000to $48,900due to the purchase of a new imprinting machine. No sales commission will result from the special order.

Prep 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 margin$ (?)

Less or Add (?) Incremental cost:

Fixed cost ?

Incremental income$(?)

Should Gruden accept the special order? Why or why not?

Gruden should

not accept/ accept (?)

the special order, as it will

increase/decrease (?)

their net income by $(?)

What assumption underlies the decision made in part (b)?

The assumption underlying the decision is that current sales

will not/will (?)

be affected if Gruden accepts the offer.