Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4.00 points Polaski Company manufactures and sells a single product called a Ret. Operating at capacity the company can produce and sell 50,000 Rets per

image text in transcribedimage text in transcribed

4.00 points Polaski Company manufactures and sells a single product called a Ret. Operating at capacity the company can produce and sell 50,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials 20 S 000,000 400,000 Direct labor 150,000 Variable manufacturing overhead 350.000 Fxed manufacturing overhead Variable selling expense 100,000 300,000 Fixed selling expense 46 S 2,300,000 Total cost The Rets normally sell for $51 each. Fixed manufacturing overhead is constant at $350,000 per year within the range of 44,000 through 50,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 44,000 Rets through regular channels next year. A large retail chain has offered to purchase 6,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order, thus variable selling expenses would be slashed by 75%. However, Polaski Company would have to purchase a special machine to engrave the retail chain's name on the 6,000 units. This machine would cost $12,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. Determine the impact on profits next year if this special order is accepted. Net profit by

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

2. Describe how technology can impact intercultural interaction.

Answered: 1 week ago

Question

7. Define cultural space.

Answered: 1 week ago