Question
2. Refer to the original data. Assume again that Polaski Company expects to sell only 22,000 Rets through regular channels next year. The Canadian Forces
2. Refer to the original data. Assume again that Polaski Company expects to sell only 22,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 14,000 Rets. The Forces would pay a fixed fee of $2.20 per Ret, and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any
type associated with this order. If Polaski Company accepts this order, by how much will profits be increased or decreased for the year? (Do not round intermediate calculations.)(Net decrease or net increase?) in profits ________ (number?) 3. Assume again that Polaski Company expects to sell only 36,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 14,000 Rets. The Forces would pay a fixed fee of $2.20 per Ret, and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Thus, accepting the Canadian Forces' order would require giving up regular sales of 14,000 Rets. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any
type associated with this order. Compute the minimum fixed fee per unit that Polaski must receive from the Canadian Forces (in addition to the reimbursement of production costs) in order to accept this order. (Do not round intermediate calculations.)Minimum fixed fee per unit in addition to reimbursement of production cost ________ (number?)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started