MO YouTube Facebook Twitch c Chege M Connect Connect Cost 16 Arce Sheridan Polski 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 as follows: Unin Total $15 $450,000 B 240,000 3 90,000 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense 9 4 270,000 120.000 180.000 Total cost $45 $1,350,000 The Rets normaly sell for $50 each. Fied manufacturing overhead is constant at 5270,000 per year within the range of 25.000 through 30,000 Rots per year Required: 1. Assume that due to a recession, Polski Company expects to sell only 25.000 Rets through reguler channels next year. A large retol chain has offered to purchase 5.000 Rets Polosk is willing to accept a 16% discount off the regular price. There would be no sales commissions on the order, thus, variable selling expenses would be slashed by 75%. However, Poloski Company would have to purchase a special machine 10 angrove the retail chain's name on the 5.000 unts. This machine would cost $10.000 Polak Company has no assurance that the real than will purchase additional units O to search RE & 3 4 5 6 7 8 9 O E 2 3 12 Uns any time in the future Determine the impact on profits next year if this special order is accepted Net increase 2. Refer to the original date. Assume again that Poleski Company expects to sell only 25.000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 5,000 Rets. The Forces would pay a foved fee of $1.80 per Ret, and in addition would reimburse Poloski Company for all costs of production variable and foredassociated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. If Polaski Company accepts this order by how much will profits be increased or decreased for the year? The increase in pro ere to search o RI e D $ 95 & 3 4 5 6 7 8 9 E 3 E 20 T Y P 3. Assume that Polaski Company expects to sell only 30,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time only purchase of 5,000 Rets. The Forces would pay a fixed fee of $180 per Ret, and in addition it would reimburse Polaski Company for all costs of production (variable and foed) associated with the units. Thus, accepting the Canadian Forces' order would require giving up regular sales of 5,000 Rets. If the Forces' order is accepted, by how much will profits be increased or decreased from what they would be the 5,000 Rets were sold through regular channels? (Negative amounts should be indicated by aminus sign) Not increase in profits to search O e 9 co $ 96 2 & 3 ( 4 5 6 7 00 9 0 E 2 E R. T Y U 0 o P