(Solved):Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of…

 

Question

Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 22,200 golf discs is:

Materials $11,100
Labor $33,966
Variable overhead $24,198
Fixed overhead $45,066
Total $114,330

Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.89 per disc for 4,680 discs. McGee would sell the discs under its own brand name in foreign markets not yet served

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