- Materials $10,896
- Labor 33,369
- Variable overhead 21,792
- Fixed overhead 45,400
- Total $111,457
Gruner also incurs 6% sales commission ($0.41) on each disc sold.
Travis Corporation offers Gruner $4.84 per disc for 5,300 discs. Travis would sell the discs under its own brand name in foreign markets not yet served by Gruner. If Gruner accepts the offer, its fixed overhead will increase from $45,400 to $50,233 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. (If answer is zero, please enter 0. Do not leave any fields blank. If amount decreases the income, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Enter all amounts in columns "Reject Order" and "Accept Order" as positive amounts and subtract where necessary.)
Reject Order Accept Order Net Income Effect
Revenues $ $ $
Materials
Labor
Variable overhead
Fixed Overhead
Sales commission