Sheridan Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,700 golf discs is:

Materials		$ 12,798
Labor		36,498
Variable overhead		23,937
Fixed overhead		46,215
Total		$119,448

Sheridan also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Sheridan $5.00 per disc for 5,600 discs. McGee 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 $5,410 due to the rental of an imprinting machine. No sales commission will result from the special order. Assume there is sufficient capacity to accommodate the special order.

View Policies Current Attempt in Progress Sheridan Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,700 golf discs is: Materials $ 12,798 Labor 36,498 Variable overhead 23,937 Fixed overhead 46,215 Total $119,448 Sheridan also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Sheridan $5.00 per disc for 5,600 discs. McGee 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 $5,410 due to the rental of an imprinting machine. No sales commission will result from the special order. Assume there is sufficient capacity to accommodate the special order. (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ $ Materials Labor Variable overhead Cost of equipment rental Net income $ $ $ (b) Should Sheridan accept the special order? Sheridan should the special order