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Question 2 7.64705 out of 10 points 2. Snickers Company produces golf discs which it normally sells to retailers for $6 each. The cost of
Question 2 7.64705 out of 10 points 2. Snickers Company produces golf discs which it normally sells to retailers for $6 each. The cost of manufacturing 25,000 golf discs is: $10,000 Materials Labor 30.000 Variable overhead 20,000 Fixed overhead 40,000 Total $100,000 Snickers also incurs 5% sales commission ($0.30) on each disc sold. Lucky Corporation offers Snickers $4.25 per disc for 3,000 discs. Lucky would sell the discs under its own brand name in foreign markets not yet served by Snickers. If Snickers accepts the offer, its fixed overhead will increase from $40,000 to $43,000 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Instructions (a) Prepare an incremental analysis for the special order.(Do not use a comma for a thousands-separator. Use minus (-) if needed) Accept order $[2] $15] S-3600 $[8] S[11] Net income effect Reject order Revenue S(1] S[4] $13] $(6 $-3600 $19] $[12] Materials Labor Variable overhead 0 S7] S[10] Fixed overhead Sales commissions 0 0 0 S[13] S[14] Net income $15] (b) Should Snickers accept the special order? Snickers should [16] the special order (Write accept or reject in the bracket), because snickers can save $[17]
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