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

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Accounting

Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,400 golf discs is:
Gruden also incurs 7% sales commission ($0.49) on each disc sold.
McGee Corporation offers Gruden $5.00 per disc for 5,700 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 $31,570 to $36,670 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 e.g.-45 or
parentheses e.g.(45).)
(b)
Should Gruden accept the special order?
Gruden should
the special order.
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