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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).)

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 3PB: Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in...
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$ Reject Order Revenues Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ (b) Should Crane accept the special order? Crane should accept the special order. 0 $ $ Accept Order 21600 i i i i 0 4500 2025 6300 4275 4500 $ Net Income Increase (Decrease) 1.000 $
Transcribed Image Text:$ Reject Order Revenues Materials Labor Variable overhead Fixed overhead Sales commissions Net income $ (b) Should Crane accept the special order? Crane should accept the special order. 0 $ $ Accept Order 21600 i i i i 0 4500 2025 6300 4275 4500 $ Net Income Increase (Decrease) 1.000 $
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).)
Transcribed Image Text: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).)
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