Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,600 golf discs is:

Materials		$ 10,584
Labor		28,812
Variable overhead		19,796
Fixed overhead		39,984
Total		$99,176

Gruden also incurs 8% sales commission ($0.56) on each disc sold. McGee Corporation offers Gruden $4.77 per disc for 5,610 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 $39,984 to $46,134 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. (Round computations for per unit cost to 4 decimal places, e.g. 15.2500 and all other computations and final answers to the nearest whole dollar, e.g. 5,725. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Reject Order		Accept Order		Net Income Increase (Decrease)
Revenues		$		$		$
Materials
Labor
Variable overhead
Fixed overhead
Sales commissions
Net income		$		$		$

(b) Should Gruden accept the special order?

Gruden should

acceptreject

the special order .