Gruden company produces golf discs which it normally sells to retailers for $7 each. the cost of manufacturing 23,600 golf discs is:

materials $ 12,036
labor 35,400
variable overhead 23,128
fixed overhead 47,200
total $117,764

gruden also incurs 8% sales commission ($0.58) on each disc sold.

mcgee corporation offers gruden $4.91 per disc for 4,930 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.

Special order carson manufacturing, inc., sells a single product for $36 per unit. at an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. carson has been offered a price of $20 per unit on a special order of 2,000 units by big mart discount stores, which would use its own brand name on the item. if carson accepts the order, material cost will be $3 less per unit than for regular production. however, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether carson should accept the special order. use a negative sign with answer to only indicate an income loss from special order; otherwise do not use negative signs with your answers.