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Gruden Company produces golf discs, which it normally sells to retailers for $8 each. The cost of manufacturing 25,000 golf discs is: Materials Labour Variable
Gruden Company produces golf discs, which it normally sells to retailers for $8 each. The cost of manufacturing 25,000 golf discs is: Materials Labour Variable overhead Fixed overhead Total $11,500 29,500 19,500 38,500 $99,000 Gruden also incurs 5% sales commission ($0.40) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 6,250 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 $38,500 to $43.100 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 per unit calculations to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 5,275.) $ Incremental contribution margin Less Incremental cost: Fixed cost Incremental income Attempts: 0 of 3 used Submit Answer Save for Later Last saved 36 minutes ago. Saved work will be auto-submitted on the due date. (b) Should Gruden accept the special order? Why or why not? Gruden should accept the special order, as it will increase their net income by $
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