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Sheridan Company produces golf discs, which it normally sells to retailers for $7 each. The cost of manufacturing 18,000 golf discs is: Sheridan also incurs
Sheridan Company produces golf discs, which it normally sells to retailers for $7 each. The cost of manufacturing 18,000 golf discs is: Sheridan also incurs 5% sales commission ( $0.35 ) on each disc sold. Dynatech Corporation offers Sheridan $5.60 per disc for 4,500 discs. Dynatech would sell the discs under its own brand name in foreign markets not yet served by Sheridan. If Sheridan accepts the offer, it will incur a one-time fixed cost of $4,500 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, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.) Should Sheridan accept the special order? Why or why not? Sheridan should the special order, as it will their net income by $ eTextbook and Media What assumption underlies the decision made in part (b)? The assumption underlying the decision is that current sales be affected if Sheridan accepts the offer
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