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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 18,300 golf discs is: Materials $ 9,333
Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 18,300 golf discs is: Materials $ 9,333 Labor 26,718 Variable overhead 19.032 Fixed overhead 37.149 Total $92,232 Gruden also incurs 4% sales commission (50.28) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 5,600 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 fred overhead will increase from $37,149 to $42059 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. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses es (45) (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses es. (451) Reject Order Accept Order Net Income Increase (Decrease) Revenues Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ $ Should Gruden accept the special order? Gruden should the special order
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