Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20,200 golf discs is:
Gruden also incurs 8% sales commission ($0.54) on each disc sold.
McGee Corporation offers Gruden $4.77 per disc for 4,740 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by