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5. 10.00 points Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are given 15 450,000 Direct materials 300,000 Direct labor Variable manufacturing overhead 90,000 210,000 Fixed manufacturing overhead 120,000 Variable selling expense selling expense 180,000 Total cost 45 1,350,000 The Rets normally sell for $50 each. Fixed manufacturing overhead is constant at 210,000 per year within the range of 20,000 through 30,000 Rets per year. Required 1. Assume that due to a recession, Polaski Company expects to sell only 20,000 Rets through regular channels next year. A large retail chain has offered to purchase 10,000 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 10,000 units. This machine would cost $20,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. Determine the impacton profits next year if this special order is accepted. Net profit increases