Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,000 golf discs is: Materials $ 6,750 Labor 21,000 Variable overhead 14,250 Fixed overhead 29,250 Total $71,250 Crane also incurs 4% sales commission ($0.28) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 4,500 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, its fixed overhead will increase from $29,250 to $33,750 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).)
Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 15,000 golf discs is: Materials $ 6,750 Labor 21,000 Variable overhead 14,250 Fixed overhead 29,250 Total $71,250 Crane also incurs 4% sales commission ($0.28) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 4,500 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Crane. If Crane accepts the offer, its fixed overhead will increase from $29,250 to $33,750 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).)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1PB: Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major...
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