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as fast as possible Polaski Company manutactures and sells a single proctuct callad a Fiet Operating at capacity, the company can produce and sell 46,000
as fast as possible
Polaski Company manutactures and sells a single proctuct callad a Fiet Operating at capacity, the company can produce and sell 46,000 Rets per year Costs associated with this Invol of production and sales are given below [7 marks] (CLOA) The Rets normally seil for $53 each. Fixed manutacturing overhead is $322,000 per year within the range of 40,000 through 46,000 Rets per year Required: The Rets normally sell for $53 each. Fixed manutaciuing overhead is $322,000 per year within the range of 40,000 through 46,000 Rets per year Assume that due to a recession. Polaski Company expects to sell only 40,000 Rets through regular channels nextyear: A large retail chain has otfered to purchase 6,000 Rets il Polaski is wiling to accept a 16% discount Required: of the regular price (ie at a price of $44.52 per Ret) There would be no sales commissions on this order thus, variable selling expenses would be slashed by 75% (1.e. 50.5 per Ret) However. Polaski Company would thave to purchase a special machine to engrave the retal chain's name on the 6,000 unts. This machine would cost 512:000. Polaski Company has no assurance that the retal chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order Step by Step Solution
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