Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $250,000 in operating assets to produce and sell 25,000 units. Its required return on investment (ROI) in its operating assets is 18% The accounting department has provided cost estimates for the new product as shown below: 29 points Total Per Unit $8.60 $6.60 $3.60 Direct materials Direct labor Variable manufacturing overhead Faxed manufacturing overhead Variable selling and administrative expenses Tixed selling and administrative expenses BO $201.250 $2.60 $ 24,250 References Required: 1. What is the unit product cost for the new product? (Round intermediate calculations and final answer to 2 decimal places.) 2. What is the markup percentage on absorption cost for the new product? (Round Intermediate calculations to 2 decimal places.) 3. What selling price would the company establish for its new product using a markup percentage on absorption cost? (Round intermediate calculations and final answer to 2 decimal places.) 1. Unt productos 2 Marku percentage on absorption cost 3. Selling price berunt 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: Total 2.85 Dots $15 Direct materials Direct labor Variable manufacturing overhead Fixed facturing overhead Variable selling expense Tixed selling expense Total cost 5 750,000 400.000 150.000 350.000 200.000 300,000 $ 2,150,000 The Rets normally sell for $48 each. Fixed manufacturing overhead is $350,000 per year within the range of 42,000 through 50,000 Rets per year Required: 1. Assume that due to a recession, Polaski Company expects to sell only 42,000 Rets through regular channels next year. A large retail chain has offered to purchase 8.000 Rets Poloski 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, Polask Company would have to purchase a special machine to engrave the retail chain's name on the 8,000 units. This machine would cost $16.000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume again that Polaski Company expects to sell only 42,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 8,000 Rets. The Army would pay a fixed fee of $1.80 per Ret, and it would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order? The Rets normally sell for $48 each. Fixed manufacturing overhead is $350,000 per year within the range of 42,000 through 50,000 Rets per year. 285 Required: 1. Assume that due to a recession, Polaski Company expects to sell only 42,000 Rets through regular channels next year. A large retail chain has offered to purchase 8,000 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 8,000 units. This machine would cost $16,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.) P Reference 2. Refer to the original data. Assume again that Polski Company expects to sell only 42,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 8,000 Rets. The Army would pay a fixed fee of $1.80 per Ret, and it would reimburse Poloski Company for all costs of production (variable and fixed) associated with the units. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 50.000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 8,000 Rets. Given this new information, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order