Gruden Company produces golf discs, which it normally sells to retailers for $7 each. The cost of manufacturing 18,000 golf discs is:

Materials		$9,000
Labour		28,080
Variable overhead		18,000
Fixed overhead		35,000
Total		$90,080

Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $5.60 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 $35,000 to $39,500 due to the purchase of a new imprinting machine. No sales commission will result from the special order.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.

Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.)

Incremental contribution margin			$
Less/Add Incremental cost:
Fixed cost			$
Incremental income			$

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Should Gruden accept the special order? Why or why not?

Gruden should _____the special order, as it will ____their net income by $ .

What assumption underlies the decision made in part (b)?

The assumption underlying the decision is that current sales ____will not or will _____be affected if Gruden accepts the offer.