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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,700 golf discs is: $12,798 Materials 36,498
Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,700 golf discs is: $12,798 Materials 36,498 Labor Variable overhead 23,937 46,215 Fixed overhead $119,448 Total Gruden also incurs 6% sales commission ($0.43) on each disc sold. McGee Corporation offers Gruden $4.96 per disc for 5,620 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 $46,215 to $51,625 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 answers to O decimal places, eg. 1250. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Net Income Reject Accept Order Increase (Decrease) Order 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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