31. Larkin Company produces golf discs which it normally sells to retailers for $6 each. The...
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31. Larkin Company produces golf discs which it normally sells to retailers for $6 each. The cost of manufacturing 25,000 golf discs is: $ 10,000 Materials Labor 30,000 Variable overhead 20,000 Fixed overhead Total 40,000 $100.000 Larkin also incurs 5% sales commission ($0.30) on each disc sold. Rudd Corporation offers Larkin $4.25 per disc for 3,000 discs. Rudd would sell the discs under its own brand name in foreign markets not yet served by Larkin. If Larkin accepts the offer, its fixed overhead will increase from $40,000 to $43,000 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Instructions (a) Prepare an incremental analysis for the special order. (b) Should Larkin accept the special order? Why or why not? 31. Larkin Company produces golf discs which it normally sells to retailers for $6 each. The cost of manufacturing 25,000 golf discs is: $ 10,000 Materials Labor 30,000 Variable overhead 20,000 Fixed overhead Total 40,000 $100.000 Larkin also incurs 5% sales commission ($0.30) on each disc sold. Rudd Corporation offers Larkin $4.25 per disc for 3,000 discs. Rudd would sell the discs under its own brand name in foreign markets not yet served by Larkin. If Larkin accepts the offer, its fixed overhead will increase from $40,000 to $43,000 due to the purchase of a new imprinting machine. No sales commission will result from the special order. Instructions (a) Prepare an incremental analysis for the special order. (b) Should Larkin accept the special order? Why or why not?
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Solution a Revenues 0 Materials 040 0 Labor 120 0 Variable overhead 080 0 F... View the full answer
Related Book For
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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