Gruden company produces golf discs which it normally sells

Reference no: EM13566889

Gruden Company produces golf discs which it normally sells to retailers for $7.09 each. The cost of manufacturing 18,600 golf discs is: Materials $9,114 Labor 29,016 Variable overhead 18,042 Fixed overhead 37,386 Total $93,558 Gruden also incurs 7% sales commission ($0.50) on each disc sold. McGee Corporation offers Gruden $5 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 $37,386 to $42,864 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.

Reference no: EM13566889

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