Ivanhoe Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,400 golf discs is: Materials Labor Variable overhead Fixed overhead Total (a) Revenues Materials Ivanhoe also incurs 5% sales commission ($0.35) on each disc sold. Wildhorse Corporation offers Ivanhoe $4.80 per disc for 5,600 discs. Wildhorse would sell the discs under its own brand name in foreign markets not yet served by Ivanhoe. If Ivanhoe accepts the offers fixed overhead will increase from $37,830 to $42,890 due to the purchase of a new Imprinting machine. No sales commission will result from the special order. Labor Variable overhead Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Fixed overhead Sales commissions Net income $9,894 (b) 31,040 19,400 Ivanhoe should 37,830 $98,164 $ Reject Order Should Ivanhoe accept the special order? the special order. $ Accept Order $ $ Net Income Increase (Decrease)

(a) (a)