Indigo Company produces golf discs, which it normally sells to retailers for $12 each. The cost of manufacturing 23,600 golf disc

Materials

$10.620

Labour

29.500

Variable overhead

20,532

Fixed overhead

39,000

Total

$99,652

Indigo also incurs 10% sales commission ($1.20) on each disc sold.

Handley Corporation offers Indigo $7.20 per disc for 5,900 discs. Handley would sell the discs under its own brand nam markets not yet served by Indigo. If Indigo accepts the offer, it will incur a one-time fixed cost of $6.500 due to the rental of an 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, eg 15.25 and final answers to

Incremental contribution margin

27317

19:22

-/5

Add Incremental cost:

Fixed cost

6600

Incremental income

20717

eTextbook and Media

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

Indigo should

accept

the special order, as it will

MacBook Pro

increase

their net income by $

191108