Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,600 golf discs is: Materials Labor Variable overhead Fixed overhead Total $ 12,036 35,400 23,128 47,200 (a) $117,764 Gruden also incurs 8% sales commission ($0.56) on each disc sold. McGee Corporation offers Gruden $4.90 per disc for 4,900 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 $47,200 to $53,700 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 eg. -45 or parentheses e.g. (45).)
Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,600 golf discs is: Materials Labor Variable overhead Fixed overhead Total $ 12,036 35,400 23,128 47,200 (a) $117,764 Gruden also incurs 8% sales commission ($0.56) on each disc sold. McGee Corporation offers Gruden $4.90 per disc for 4,900 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 $47,200 to $53,700 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 eg. -45 or parentheses e.g. (45).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 23,600 golf discs is:
Materials
Labor
Variable overhead
Fixed overhead
Total
$ 12,036
(a)
35,400
23,128
47,200
$117,764
Gruden also incurs 8% sales commission ($0.56) on each disc sold.
McGee Corporation offers Gruden $4.90 per disc for 4,900 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 $47,200 to $53,700 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).)
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