G Advanced Regular Selling Price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing OH Variable selling expense Consoldate What if Analysis Da Total 50.00 22.00 660,000 9.00 270.000 3.00 90,000 7.00 210,000 4.00 120,000 7.00 210,000 5,000 1.80 41.00 Part 1 Part2 Fixed selling expense Assume that due to a recession, Polaski Company expects to sell only 25,000 Rets through regular channels next year. A large retail chain has offered to purchase 5,000 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 5,000 units. This machine would cost $10,000. 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. Refer to the original data. Assume again that Polaski Company expects to sell only 25,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 5,000 Res 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. If Polaski Company accepts the order, by how much will profits increase or decrease for the year? 5,000 Part 3 Assume the same situation as that described in (2) above, except that the company expects to sel 30,000 Rets through regular channels next year. Thus, accepting the US Army's order would require giving up regular sales of 5,000 Rets. If the Army's order is accepted, by how much will profits increase or decrease from what they would be if the 5,000 Rets were sold through regular channels? nstraints + MacBook A 44 F7 11 FO P A 44 19 F10 F12 10 5000 B D E Percentage Discount 16% Discounted selling price per unit Wariable costs per Unit Direct materials Direct labor Variable manufacturing overhead Variable selling expense 42.00 22.00 8.00 3.00 1.00 Total variable cost per unit 35.00 Contribution margin per unit 7.00 Units 5,000 Total contribution margin for order 35,000 Change in fixed costs 10,000 Change in net operating income 25,000 2. Impact on Profits Units 5,000 Pa Fixed Fee Per Unit S 1.80 Total manufacturing cost per unit 41.00 Revenue from the order Selling price unit Variable manufacturing cost per unit Contribution margin per unit $ 42.80 34.00 $ 8.80 Units 5,000 Total contribution margin for order $ 44,000 Change in fixed costs (if any) 10,000 Change in net operating income 34,000 3. Impact on Profits Contribution margin per unit from US. Army Contribution margin per unit from regular sales Net incresae (decrease) in CM per unit Number of units Net change in profits if special order is accepted Part 3 Lost regular sales 5,000 8.80 + Coven 5,000 Special O Allocating Constrained Resource Using Solver for Constraints ct destination and press ENTER or choose Paste