Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 19,500 golf discs is:

Materials $ 8,775

Labor 30,225

Variable overhead 19,305

Fixed overhead 38,415

Total $96,720

Gruden also incurs 8% sales commission ($0.55) on each disc sold.

McGee Corporation offers Gruden $4.77 per disc for 4,920 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 $38,415 to $44,725 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. (Round answers to 0 decimal places, e. g. 1250. Enter negative amounts using either a negative sign preceding the number e. g. -45 or parentheses e. g. (45).)

Accept

Order Net Income
Revenues $23468 $23468

Materials

Labor

Variable overhead

Fixed overhead

Sales commissions $0 $0

Net income

Instructions: use the following information to construct the 2000 balance sheet and income statement for carolina business machines. round all numbers to the nearest whole dollar. all numbers are in thousands of dollars. be sure to read the whole problem before you jump in and get started. at the end of 1999 the firm had $43,000 in gross fixed assets. in 2000 they purchased an additional $14,000 of fixed asset equipment. accumulated depreciation at the end of 1999 was $21,000. the depreciation expense in 2000 is $4,620. at the end of 2000 the firm had $3,000 in cash and $3,000 in accounts payable. in 2000 the firm extended a total of $9,000 in credit to a number of their customers in the form of accounts receivable. the firm generated $60,000 in sales revenue in 2000. their cost of goods sold was 60 percent of sales. they also incurred salaries and wages expense of $10,000. to date the firm has $1,000 in accrued salaries and wages. they borrowed $10,000 from their local bank to finance the $15,000 in inventory they now have on hand. the firm also has $7,120 invested in marketable securities. the firm currently has $20,000 in long-term debt outstanding and paid $2,000 in interest on their outstanding debt. over the firm's life, shareholders have put up $30,000. eighty percent of the shareholder's funds are in the form of retained earnings. the par value per share of carolina business machines stock is

Your take on decision making process

Aminor has the legal right to repudiate