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How do you solve this problem? This is the entire question Gruden Company produces golf discs which it normally sells to retailers for $7 each.

How do you solve this problem? This is the entire question

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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 17,800 golf discs is: Materials $ 8,366 Labor 25,988 Variable overhead 17,266 Fixed overhead 35,600 Total $87.220 Gruden also incurs 7% sales commission ($0.48) on each disc sold. McGee Corporation offers Gruden $4.81 per disc for 5,910 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 $35,600 to $40,250 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 answers to O decimal places, e.g. 1250. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Reject Accept Increase Order Order [Decrease) Revenues $ Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ $ (b) Should Gruden accept the special order? Gruden should * the special order

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