(Solved):Gruden Company produces golf discs which it normally sells to retailers for $6.87 each. The cost…

 

Question

Gruden Company produces golf discs which it normally sells to retailers for $6.87 each. The cost of manufacturing 18,500 golf discs is: Materials $9,250, Labor 28,305, Variable overhead 18,500, Fixed overhead 44,800, for a Total of $92,500.

Gruden also incurs 6% sales commission ($0.41) on each disc sold. McGee Corporation offers Gruden $5 per disc for 5,800 discs. McGee would sell the discs under its own brand name in foreign markets

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