Gruden Company produces golf discs which it normally sells to retailers for $7 each. The...
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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,400 golf discs is: Materials Labor Variable overhead Fixed overhead Total $ 9,894 31,040 19,400 37,830 $98,164 Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 5,600 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Gruden. If Gruden accepts the offer, its fixed overhead will increase from $37,830 to $42,890 due to the purchase of a new imprinting machine. No sales commission will result from the special order. (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) (a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ $ $ Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ $ $ (b) Should Gruden accept the special order? Gruden should the special order
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