(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 16,700 golf discs is:

Materials $ 8,350
Labor 24,883
Variable overhead 17,702
Fixed overhead 32,899
Total$ 83,834

Gruden also incurs 6% sales commission ($ 0.41) on each disc sold.

McGee Corporation offers Gruden $ 4.82 per disc for 5,110 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by

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