Gruner also incurs 7 sales commission 048 on each disc

Reference no: EM13601522

Gruner Co. produces golf discs which it normally sells to retailers for $6.92 each. The cost of manufacturing 20,100 disc is :

Materials $10,251
Labor 30,954
Variable overhead 20,301
Fixed overhead 39,396
100,902

Gruner also incurs 7% sales commission ($0.48) on each disc. Travis Corporation offers Gruner $4.97 per disc for 5,800 disc. 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 $39,396 to 44,095 due to the purchase of a new imprinting machine. No sales commission will result from the special order.
Reject Accept order Net income.

Reference no: EM13601522

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