Gruden Company produces golf discs, which it normally sells to retailers for $12 each. The...
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Accounting
Gruden Company produces golf discs, which it normally sells to retailers for $12 each. The cost of manufacturing 23,600 golf discs is:
Materials
$9,440
Labour
29,500
Variable overhead
20,532
Fixed overhead
36,500
Total
$95,972
Gruden also incurs 5% sales commission ($0.60) on each disc sold. McGee Corporation offers Gruden $9.60 per disc for 5,900 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 $36,500 to $43,200 due to the purchase of a new imprinting machine. No sales commission will result from the special order.
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
Prepare an incremental analysis for the special order. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.)
Incremental contribution margin
$
LessAdd Incremental cost:
Fixed cost
Incremental income
$
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