Student Name: Marthin kehn 1. Gruden Company produces golf discs which it normally sells to retailers for 57 each. The cost of manufac Materials Labor Variable overhead Fixed overhead Total Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 5,000 discs. McGee would sell the discs under its not yet served by Gruden. If Gruden accepts the offer, its fixed overhead will increase from $40,000 new imprinting machine. No sales commission will result from the special order. (15 PTS) Instructions (a) Prepare an incremental analysis for the special order. (b) Should Gruden accept the special order? Why or why not? (c) What assumptions underlie the decision made in part (b)? 2. On January 2, 2016, Twilight Hospital purchased a $100,000 special radiology scanner from 4 years and was estimated to have no disposal value at the end of its useful life. The straight- scanner. Annual operating costs with this scanner are $105,000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, the scanner in 2016 from Bella Inc. was a mistake. He points out that Dyno has a scannert in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost the scanner purchased last year. The hospital agrees that both scanners are of equal quali value. Jacob agrees to buy the old scanner from Twilight Hospital for $50,000 Instructions (15 PTS) 1 2 2017 compute the pain Approximately one year later, the hospital is approached Own Techno lesern, bo the scanner in 2016 from Bella Inc. was a mistake. He points out that Dyno has sean that will in operating expenses over its 3-year useful life. Jacob notes that the new scanner will $110,04 the scanner purchased last year. The hospital agrees that both scanners are of equal quality. Then value Jacob agrees to buy the old scanner from Twilight Hostal for $50.000 Instructions (15 PTS) If Twilight Hospital sells its old scanner on January 2, 2017, compute the gain or loss of (b) Using Incremental analysis, determine if Twilight Hospital should purchase the new scanner (c) Explain why Twilight Hospital might be reluctant to purchase the new scanner, regardless of analysis in (b) 3. Cawley Company makes three models of tasers. Information on the three products is given Tingler Shocker Sales $300,000 Variable expenses 150,000 Contribution margin 150,000 Fixed expenses 120,000 Net income $ 30,000 Fixed expenses consist of $300,000 of common costs allocated to the three products based expenses of $30,000 (Tingler), $80,000 (Shocker), and $35,000 (Stunner). The common models are produced. The other fixed expenses would be eliminated if a model is phased James Watt, an executive with the company, feels the Stunner line should be discontinue Instructions (a) Compute current net income for Cawley Company. (b) Compute net income by product line and in total for Cawley Company if the compan discontinues the Stunner product line. (Hint: Allocate the $300,000 common costs to th relative sales.) (c) Should Cawley eliminate the Stunner product line? Why or why not? Student Name: Marthin kehn 1. Gruden Company produces golf discs which it normally sells to retailers for 57 each. The cost of manufac Materials Labor Variable overhead Fixed overhead Total Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 5,000 discs. McGee would sell the discs under its not yet served by Gruden. If Gruden accepts the offer, its fixed overhead will increase from $40,000 new imprinting machine. No sales commission will result from the special order. (15 PTS) Instructions (a) Prepare an incremental analysis for the special order. (b) Should Gruden accept the special order? Why or why not? (c) What assumptions underlie the decision made in part (b)? 2. On January 2, 2016, Twilight Hospital purchased a $100,000 special radiology scanner from 4 years and was estimated to have no disposal value at the end of its useful life. The straight- scanner. Annual operating costs with this scanner are $105,000. Approximately one year later, the hospital is approached by Dyno Technology salesperson, the scanner in 2016 from Bella Inc. was a mistake. He points out that Dyno has a scannert in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost the scanner purchased last year. The hospital agrees that both scanners are of equal quali value. Jacob agrees to buy the old scanner from Twilight Hospital for $50,000 Instructions (15 PTS) 1 2 2017 compute the pain Approximately one year later, the hospital is approached Own Techno lesern, bo the scanner in 2016 from Bella Inc. was a mistake. He points out that Dyno has sean that will in operating expenses over its 3-year useful life. Jacob notes that the new scanner will $110,04 the scanner purchased last year. The hospital agrees that both scanners are of equal quality. Then value Jacob agrees to buy the old scanner from Twilight Hostal for $50.000 Instructions (15 PTS) If Twilight Hospital sells its old scanner on January 2, 2017, compute the gain or loss of (b) Using Incremental analysis, determine if Twilight Hospital should purchase the new scanner (c) Explain why Twilight Hospital might be reluctant to purchase the new scanner, regardless of analysis in (b) 3. Cawley Company makes three models of tasers. Information on the three products is given Tingler Shocker Sales $300,000 Variable expenses 150,000 Contribution margin 150,000 Fixed expenses 120,000 Net income $ 30,000 Fixed expenses consist of $300,000 of common costs allocated to the three products based expenses of $30,000 (Tingler), $80,000 (Shocker), and $35,000 (Stunner). The common models are produced. The other fixed expenses would be eliminated if a model is phased James Watt, an executive with the company, feels the Stunner line should be discontinue Instructions (a) Compute current net income for Cawley Company. (b) Compute net income by product line and in total for Cawley Company if the compan discontinues the Stunner product line. (Hint: Allocate the $300,000 common costs to th relative sales.) (c) Should Cawley eliminate the Stunner product line? Why or why not