Gruden Company produces golf discs, which it normally sells to retailers for $9 each. The cost of manufacturing 21,000 golf discs is: Materials Labour Variable overhead Fixed overhead $10,080 31.080 21,000 38.000 $100,160 Total Gruden also incurs 5% sales commission ($0.45) on each disc sold. McGee Corporation offers Gruden $5.40 per disc for 5,250 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 $38,000 to $44.900 due to the purchase of a new imprinting machine. No sales commission will result from the special order. 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 $ V Incremental cost: Fixed cost Incremental income $ e Textbook and Media Question Part Score --/4 Should Gruden accept the special order? Why or why not? Gruden should the special order, as it will V their net income by $ Clarington Company makes three models of phasers. Information on the three products is given below: Stunner Sales $301.000 Variable expenses 154.000 Contribution margin 147.000 Fixed expenses 117.000 Net income $30.000 Double- Set $451,500 190,500 261.000 218.900 $42,100 Mega-Power $188,125 142.000 46.125 87.900 ($41,775) Fixed expenses consist of $290,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,300 (Stunner), $74,600 (Double-Set), and $29,900 (Mega-Power). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is discontinued. John Liu, an executive with the company, feels the Mega-Power line should be discontinued to increase the company's net income. Calculate current net income for Clarington Company. Current net income $ Calculate net income by product line and in total for Clarington Company if the company discontinues the Mega-Power product line. (Hint: Allocate the $290.000 common costs to the two remaining product lines based on their relative sales.) Stunner Double-Set Total Net income $ $ $ e Textbook and Media Question Part Score --16 Should Clarington eliminate the Mega-Power product line? Why or why not? Clarington eliminate the Mega-Power product line. Elimination of the line would cause net income to