Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,100 golf discs is:

Materials		$ 12,474
Labor		36,036
Variable overhead		23,562
Fixed overhead		46,431
Total		$118,503

Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 4,500 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 $46,431 to $52,651 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 $ TA $ Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ $ $ $ $ (b) Should Gruden accept the special order? Gruden should the special order