Sunland Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,100 golf discs is:

Materials		$ 9,550
Labor		29,414
Variable overhead		20,437
Fixed overhead		38,009
Total		$97,410

Sunland also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Sunland $4.90 per disc for 6,000 discs. McGee 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 $6,170 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).)

		Reject Order		Accept Order		Net Income Increase (Decrease)
Revenues		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Materials		enter a dollar amount		enter a dollar amount		enter a dollar amount
Labor		enter a dollar amount		enter a dollar amount		enter a dollar amount
Variable overhead		enter a dollar amount		enter a dollar amount		enter a dollar amount
Cost of equipment rental		enter a dollar amount		enter a dollar amount		enter a dollar amount
Net income		$enter a total amount		$enter a total amount		$enter a total amount

(b) Should Sunland accept the special order?

Sunland should select an option acceptreject the special order .

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