Prepare an incremental analysis for the special order

Assignment Help Managerial Accounting
Reference no: EM132986538

Question - Gruden Company produces golf discs, which it normally sells to retailers for $12 each. The cost of manufacturing 18,400 golf discs is:

Materials $10,488

Labour 30,544

Variable overhead 22,080

Fixed overhead 41,000

Total $104,112

Gruden also incurs 5% sales commission ($0.60) on each disc sold.

McGee Corporation offers Gruden $7.20 per disc for 4,600 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 $41,000 to $46,600 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.

Should Gruden accept the special order? Why or why not?

Gruden should not accept/accept the special order, as it will increase/decrease their net income by $?

What assumption underlies the decision made in part (b)?

The assumption underlying the decision is that current sales will/will not be affected if Gruden accepts the offer.

Reference no: EM132986538

Questions Cloud

Main approaches to database programming : List the three main approaches to database programming. What are the advantages and disadvantages of each approach?
Find the accounts receivable turnover : The Accounts Receivable balances at the beginning and end of the year were $620000 and $1047000, respectively. Find the accounts receivable turnover
Developing the security program : An information security program is entire set of activities, resources, personnel, and technologies used by an organization to manage the risks to information
What must total revenue be : Assuming a tax rate of 35%, what must total revenue be in 2021 in order for X Company to earn profit after taxes of $187,000
Prepare an incremental analysis for the special order : Gruden Company produces golf discs, which it normally sells to retailers for $12 each. Prepare an incremental analysis for the special order
Calculate the annual cash flow : Calculate the annual cash flow that would result from this new activity, over the life of the proposed investment and before taking into account
Explain the two limitations of hedging the transaction : Explain the two (2) limitations of hedging the transaction exposure. Explain how a company can use a parallel loan to perform long-term hedge
What is cost of goods manufactured : Answer the following questions using the information below: Beginning finished goods, 1/1/2015 $40,000. What is cost of goods manufactured for 2015
Health care compliance : What is the difference between the Stark Law and the AKS? types of exceptions, and penalties for violations.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd