Business, 06.04.2020 23:15 louie8656

Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20,000 golf discs is:
Materials $10,000
Labor 30,000
Variable overhead 20,000
Fixed overhead 40,000
Total $100,000

Gruden also incurs 4% sales commission ($0.28) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 4,800 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 $39,794 to $44,824 due to the purchase of a new imprinting machine. No sales commission will result from the special order.

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 Accept Order Net Income
Order Increase
(Decrease)

Revenues $ $ $
Materials
Labor
Variable overhead
Fixed overhead
Sales commissions
Net income $ $ $

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Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of man...

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