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Sunland Company produces golf discs, which it normally sells to retailers for $9 each. The cost of manufacturing 20,000 golf discs is: Sunland also incurs
Sunland Company produces golf discs, which it normally sells to retailers for $9 each. The cost of manufacturing 20,000 golf discs is: Sunland also incurs 5% sales commission (\$0.45) on each disc sold. Sipacore Corporation offers Sunland $4.50 per disc for 5.000 discs. Sipacore would sell the discs under its own brand name in foreign markets not yet served by Sunland. If Sunland accepts the offer, it will incur a one-time fixed cost of $5,100 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, eg. 15.25 and final answers to 0 decimal places, eg. 5,275.) Incremental contribution margin Incremental cost: Fixed cost Incremental income eTextbook and Media Should Sunland accept the special order? Why or why not? Sunland should the special order, as it will their net income by $ What assumption underlies the decision made in part (b)? The assumption underlying the decision is that current sales be affected if Sunland accepts the offer
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