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having trouble determining the data rolaski Company manufactures and selis a single procuct called a ket. Uperating at capacity, the company can procuce and seal
having trouble determining the data
rolaski Company manufactures and selis a single procuct called a ket. Uperating at capacity, the company can procuce and seal 30,000 Rets per year. Costs associated with this level of production and sales are given below The Rets normally sell for $46 each. Foxed manufacturing overhead is $210,000 per year within the range of 21,000 through 30,000 Rets per year Required: chain has offered to purchase 9,000 Rets if Polasid is wiling to accept a 16% discount off the regular price. There would be no sales commissions on this order, thus, variable selling expenses would pe slashed by 75%. Howevet, Polaski Company would have to purchase a special machine to engrave the retail chain's name on the 9,000 units. This machine would cost $18,000. Polaski Compary has no assurance that the retall chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your intermediote colculotions to 2 decimal ploces.) 2. Refer to the original data. Assume sgain that Polaski Company expects to sell only 21,000 Rets through reguiar channels next year The US. Army would like to make a one-time-only purchase of 9.000 Rets. The Army would reimburse Polaska for all of the variable and foxed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of $180 per unit 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 US Army/s special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 30,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 9.000 Rets. Given this new information, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order Step by Step Solution
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