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produces golf discs, which it normally sells to re 3 $9,600 31,000 18,000 42,000

produces golf discs, which it normally sells to re 3 $9,600 31,000 18,000 42,000

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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A4

Sunland Company produces golf discs, which it normally sells to retailers for $9 each. The cost of manufacturing 20,000 golf discs is: Materials Labour Variable overhead Fixed overhead Total $9,600 31,000 18,000 42,000 $100,600 Sunland also incurs 5% sales commission ($0.45) on each disc sold. Sipacore Corporation offers Sunland $4.50 per disc for 5,000 discs. Sipacore would sell the discs under its own brand name in foreign markets not yet served by Sunland. If Sunland accepts the offer, it will incur a one-time fixed cost of $5,100 due to the rental of an imprinting machine. No sales commission will result from the special order.
Transcribed Image Text:Sunland Company produces golf discs, which it normally sells to retailers for $9 each. The cost of manufacturing 20,000 golf discs is: Materials Labour Variable overhead Fixed overhead Total $9,600 31,000 18,000 42,000 $100,600 Sunland also incurs 5% sales commission ($0.45) on each disc sold. Sipacore Corporation offers Sunland $4.50 per disc for 5,000 discs. Sipacore would sell the discs under its own brand name in foreign markets not yet served by Sunland. If Sunland accepts the offer, it will incur a one-time fixed cost of $5,100 due to the rental of an imprinting machine. No sales commission will result from the special order.
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