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Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,100 golf discs is: Materials Labor Variable overhead Fixed overhead Total Crane also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Crane $5.00 per disc for 4,600 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, it will incur a one-time fixed cost of $4,840 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).) Revenues Materials Labor Variable overhead Cost of equipment rental Net income $ 7,852 21,744 14,496 30,502 $74,594 (b) Crane should 69 $ $ Should Crane accept the special order? Reject Order the special order. $ $ Accept Order $ 69 $ Net Income Increase (Decrease)

Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,100 golf discs is: Materials Labor Variable overhead Fixed overhead Total Crane also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Crane $5.00 per disc for 4,600 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, it will incur a one-time fixed cost of $4,840 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).) Revenues Materials Labor Variable overhead Cost of equipment rental Net income $ 7,852 21,744 14,496 30,502 $74,594 (b) Crane should 69 $ $ Should Crane accept the special order? Reject Order the special order. $ $ Accept Order $ 69 $ Net Income Increase (Decrease)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,100 golf discs is: Materials Labor Variable overhead Fixed overhead Total Crane also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Crane $5.00 per disc for 4,600 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, it will incur a one-time fixed cost of $4,840 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).) Revenues Materials Labor Variable overhead Cost of equipment rental Net income $ 7,852 21,744 14,496 30,502 $74,594 (b) Crane should 69 $ $ Should Crane accept the special order? Reject Order the special order. $ $ Accept Order $ 69 $ Net Income Increase (Decrease)
Transcribed Image Text:Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,100 golf discs is: Materials Labor Variable overhead Fixed overhead Total Crane also incurs 6% sales commission ($0.42) on each disc sold. McGee Corporation offers Crane $5.00 per disc for 4,600 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, it will incur a one-time fixed cost of $4,840 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).) Revenues Materials Labor Variable overhead Cost of equipment rental Net income $ 7,852 21,744 14,496 30,502 $74,594 (b) Crane should 69 $ $ Should Crane accept the special order? Reject Order the special order. $ $ Accept Order $ 69 $ Net Income Increase (Decrease)
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